Troubled steel company Tata took a £200m hit on the sale of its struggling “long products” business to turnaround investor Greybull.
Annual accounts filed at Companies House for Tata Steel UK (TSUK) reveal the formal sale of the Scunthorpe-based business in May 2016 for a nominal £1 put a major hole in the company’s finances. New owner Greybull agreed the deal the previous month, saying it would deliver a “cost-led turnaround”.
British Steel sign
Tatas long products business was rebranded as British Steel by its new owners CREDIT: PA
It soon renamed the business as British Steel, bringing back to life a name that was once a mainstay of UK industry. British Steel took on 4,500 workers in the sale as TSUK restructured towards higher-margin products in the face of heavy losses, and soon the new owner announced the long products operation had “been profitable for months”.
However, TSUK executives have since said they are privately “furious” at what they see as British Steel claiming the benefits of their work to get the business back on its feet, which included a painful restructuring that saw almost 1,000 redundancies ahead of the sale.
Tata steel worker
A Tata employee checks steel products at one of the companys UK plants CREDIT: TATA
TSUK accounts for the year to the end of March 2017 also indicate that £74m of stock and raw materials were transferred as part of the disposal, which a source close to the deal said was likely to be paid back by the new owners over time.
The loss on Scunthorpe was a major contributor to TSUK making an annual pre-tax loss of £558m, up from £426m in the previous period. This came despite revenue edging up 1pc to £1.99bn. |
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