Tata Steel UK, the British arm of India's Tata Steel, will hold exclusive talks with trading firm Liberty House to sell its speciality steel business as its parent seeks to offload loss-making assets and restructure European operations.
The company has put an enterprise value of 100 million pounds ($124.3 million) on the speciality operations, which employ about 1,700 people and include sites in Britain and China, it said in Monday's statement announcing the agreement to hold exclusive talks.
The speciality steel division is one of the world's biggest suppliers for the aerospace industry, with customers including Rolls-Royce, Boeing and Airbus.
Tata Steel, India's biggest steelmaker by overall capacity, has been trying to restructure its UK business, including options such as a sale and partnerships.
In April the company agreed to sell its long-products business in Scunthorpe to investment firm Greybull Capital for 1 pound. In July Tata Steel said it was in talks with Germany's ThyssenKrupp AG over a joint venture for its European operations.
Tata Steel's parent company, Tata Sons, is embroiled in a bitter battle with former chairman Cyrus Mistry, who has been removed from his executive roles at three of the group's companies since being ousted as head of the conglomerate's holding company in an October boardroom coup.