Hopes that the jobs could be saved in the UK steel industry have taken an upturn following the announcement that Tata Steel has signed a Letter of Intent with Greybull Capital for the potential sale of its Long Products business, based in Scunthorpe.

Tata say that the move would lead to exclusive negotiations with the investment firm that would cover the company's UK-based assets including the Scunthorpe steelworks, a design consultancy in York, mills in Teesside and an engineering workshop in Workington.

Unions welcomed the announcement, the Press Association said, following a spate of job losses in the steel industry and fears for the future of Tata's Long Products business.

Greybull Capital LLP confirms that it has signed a Letter of Intent with Tata Steel to enter exclusive discussions on the possible acquisition of the Long Products Europe business based in Scunthorpe, North Lincolnshire. Whilst this is an important milestone, much work remains to be done to reach a successful outcome.

Greybull Capital statement

This is an extremely critical time for the whole industry, and we have been working hard to explore all options that could provide a future for the Long Products Europe business. We will now move into detailed negotiations with Greybull Capital. It is too early to give any certainty about the potential outcome of these discussions. We will continue to work closely with our trade unions and works councils and will communicate any relevant news to employees on an ongoing basis. In the meantime, Tata Steel and our Long Products Europe business will continue to work closely with customers to deliver high-quality products.

Karl Koehler, chief executive of Tata Steel's European operations

About 4,700 people are employed at Long Products Europe and its distribution facilities. Tata Steel Europe employs around 30,000 people across Europe, including about 17,000 in the UK.