Greybull Capital assessing Tata's specialty steels business that counts Rolls-Royce and JLR as clients

Greybull Capital is considering acquiring another portion of Tata Steel's UK business. Post the acquisition of Tata's Scunthorpe-based long products division, the private equity group is assessing the Indian company's specialty steels business, which Tata claims is the world's third largest supplier of aerospace steel.

This specialty business, which has clients such as Rolls-Royce and Jaguar Land Rover, is engaged in the manufacture of high-end steel for aircraft, oil drilling equipment and cars. It has 2,000 employees across its two manufacturing sites in Rotherham and Stocksbridge near Sheffield.

This business uses an electric-powered arc furnace in its Rotherham plant to make high-quality alloys by melting scrap. It has been least affected by China's steel dumping and is known to sell its high-quality niche metals at a premium.

The UK government considers this business to be "very impressive" and expects to see a lot of interest from potential buyers for the same. Workers of this business too boast that an aircraft using its steel in its landing gear touches down every three seconds across the world.

Sources aware of the situation told Financial Times that Greybull's representatives visited Rotherham on 11 April. However, the family-owned fund refused to comment on speculation. It added that its focus was to complete the Scunthorpe transaction, which would help save 4,800 jobs.

Tata Steel had on 30 March announced it would sell its loss-making UK steel business, which includes Port Talbot and other steelmaking sites in the country. However, a sale of only its specialty steels arm business to Greybull would contradict the company's earlier statement that it would sell the business as a whole and not in parts.

The news about Greybull's interest follows Tata Steel appointing Bimlendra Jha, an executive committee member of Tata Steel Europe, as the new chief executive of Tata Steel UK. Jha oversaw the sale of its Scunthorpe-based business to Greybull Capital.