London: Tata Steel on Monday kickstarted the sale of its cash-guzzling UK arm with divestment of Long Products Europe business to investment firm Greybull Capital for a nominal amount of 1 pound.

The transaction likely to conclude by June this year.

The embattled steelmaker appointed KPMG LLC as process advisor for the “thorough, but expedited sale” of its entire shareholding in its subsidiary Tata Steel UK, which includes Britain’s largest steel plant at Port Talbot. Tata Steel UK on Monday announced “signing of an agreement to sell its Long Products Europe business to family investment office, Greybull Capital. “Sale for a nominal consideration, would be in exchange for Greybull Capital taking on the whole of the business, including assets and relevant liabilities, and securing an appropriate funding package.” The deal also includes clauses that workers accept a one year pay cut of 3 per cent and changes in the pension scheme, which Britain’s largest trade union, Unite, said is acceptable in order to save 4,400 jobs in, but “warned” UK government that it should initiate measures to protect the steel sector. The Long Products Europe business employs 4,800 people – 4,400 in the UK and 400 in France. Greybull is arranging an investment and financial package of 400 million GB pound (about USD 570 million), it said. The financing, mainly through a combination of banks and shareholders, will be available to fund the working capital and future investments. Besides, an agreement to reset cost base of the business has been reached with key suppliers and trade unions, Greybull Capital added. Greybull Capital will rename the Scunthorpe steelworks, part of Tata’s Long Products Europe, as British Steel after the acquisition, which it says is expected in eight weeks. According to the Telegraph, Greybull will pay a nominal amount of one GB pound or Rs 95 to acquire Tatas long products business in Europe. Meanwhile welcoming the deal, Unite said that “Government ministers must now play their part too.” With the initiation of the sale process for UK business, Tatas plans to play a leading role in UK’s once-storied sector that the Indian conglomerate had entered nearly a decade ago with a USD 14-billion takeover with much fanfare, is coming to an end. Tatas entered UK’s steel sector, that once dominated the British economy, in early 2007 with acquisition of Anglo-Dutch steelmaker Corus after a fiercely fought takeover battle with Brazil’s CSN — which till date remains the biggest ever overseas acquisition by an Indian group. — PTI