A DEAL has been reached for Greybull Capital to buy Tata Steel's loss making Long Products business, signalling the return of the British Steel name.

Following six months of negotiations, the agreement was announced just after 11pm on Tuesday night.

The Indian steelmaker's Long Products business employs about 900 people across the North-East and York.

The deal has been done for a nominal £1 fee.

Lawyers have been putting the finishing touches to the handover since a provisional agreement was announced in April.

A statement released by Tata said during the last 12 months, the Long Products Europe business has implemented a transformation plan "including a portfolio restructuring of assets, underpinned by committed support from employees and their trade unions. This has focused the business on higher-value markets supported by a more competitive cost base."

Bimlendra Jha, executive chairman of Long Products Europe and CEO of Tata Steel UK, said: “As a responsible seller, Tata Steel is delighted to have secured a buyer for this business and we hope that under Greybull Capital ownership, the business will continue the momentum of the improvement program that has been initiated in the last 12 months. 

“Employees and trade unions have worked closely with the Long Products Europe management team to improve the business’s prospects, putting it in a more competitive position than it has been for many years. It is through their dedication and hard work that we are in this position today in spite of continued challenges in the market." 

Completion of the deal brings some rare good news to the UK steel sector which has been rocked by plant closures, thousands of job losses and fears that the domestic industry could fold entirely in the face of falling steel prices, high energy costs and cheap imports, particularly from China.

It is understood that the deal will see up to £400m invested in the Long Products sites, including at Scunthorpe steelworks where about 3,000 people are employed.

Greybull specialises in turning around struggling companies, with acquisitions including Monarch Airlines and the convenience chain stores of retailer Morrison among its high profile deals.

Celebratory events are planned to take place signalling the end of the protracted talks with Tata, and signs will be unveiled bearing the words 'British Steel' — the name of the former nationalised industry that is being resurrected for the business.

Long Products makes a wide range of heavy industrial steelwork, such as railway lines and goods for the construction industry. It has been up for sale for more than 18 months after Tata deemed it surplus to requirements.

The Mumbai-based multinational subsequently decided to offload all of its UK sites, including pipe mills in Hartlepool which employ about 600 workers. Separate talks to find a buyer for those assets are still ongoing amid concerns that the cost of taking on responsibility for pensions will deter potential investors. The £14bn British Steel Pension Scheme attached to Tata Steel UK, has 130,000 members and carries a £700m deficit. The government has launched a consultation over proposed changes, that would reduce future payouts and separate the fund from the business.

Greybull's plan for Long Products, including Teesside Beam Mill, near Redcar, a Darlington steel finishing base and a York design hub, involve a £400m investment package, for which it will provide half the funding. However, the takeover will be completed without any government finance. Ministers had been in talks with the investment firm about a potential loan on commercial terms for tens of millions of pounds. Financial institutions will instead provide the balance.