The UK division of Tata Steel (www.tatasteeleurope.com) has signed a Letter of Intent with the Liberty House Group to enter into exclusive negotiations for the “potential sale” of its speciality-steels business for an ‘enterprise value’ (calculated as the market capitalisation plus debt, minority interest and preferred shares, minus total cash and cash equivalents) of £100 million.

Metals group Liberty House made a high-profile investment in the UK steel industry when it bought the majority of Caparo Industries’ assets from the administrators in 2015.

Around 1,700 people are employed at the Indian-owned speciality-steels business in the UK. The deal covers several South Yorkshire-based assets, including the Rotherham electric-arc steelworks, the steel-purifying facility in Stocksbridge and a mill in Brinsworth. It also covers operations in Wednesbury, plus one service centre in Bolton and three in China.

Tata Steel UK chief executive Bimlendra Jha said: “The speciality-steels business is independent of the pan-European strip-products supply chain, and this announcement is in line with the overall restructuring strategy of the UK portfolio. This is an important step forward in seeking a future for the business, and we have reached this stage thanks to the efforts of employees, trade unions and management.”

Trade union Unite said that job security and the future of the pension scheme are “key priorities” following Tata’s announcement, and that the “the devil will be in the detail.”

Harish Patel, Unite national officer for metals, said: “This announcement is welcome, as we can at last see some movement towards certainty for our members, who have lived with a dark cloud of uncertainty hanging over them for more than a year. Despite these difficulties, our members have continued to work hard and to deliver what has been asked of them by Tata Steel.

“For months, the joint steel unions have been in discussions with the company and the Government at the highest levels to secure a sustainable future for all the UK businesses. The future of a strong and vibrant UK steel industry should be the cornerstone of the Government’s much-heralded industrial strategy.”