THE business building an £82m North-East train building factory is selling its housing division.

Family-owned Shepherd Group is offloading its Shepherd Homes operation to Galliford Try.

Bosses at the York-based group, which has offices in Darlington, expect the sale to be completed later this month, with 60 Shepherd staff transferring to Galliford’s housing business, Linden Homes.

They added the deal will see Galliford take on six active sites and a further five at the planning stage.

Shepherd is building Hitachi Rail Europe’s 730-job factory in Newton Aycliffe, County Durham, and says the Galliford agreement will allow it to focus more on its Portakabin business.

David Williams, Shepherd Group chairman, said: “This was not an easy decision for the board, particularly given the recent strong performance of Shepherd Homes, but it represents an exciting opportunity for the business and its employees.

“This decision will enable the wider Shepherd Group to continue to pursue its strategy of focusing future investment on distinct areas, including further expansion of our Portakabin business.”

The announcement comes after Shepherd last month revealed almost 200 jobs could be under threat in its construction division.

The company said is consulting with staff, which is expected to result in cuts to back-office roles.

Shepherd’s two contracting businesses employ almost 1,400 staff.

Latest accounts for Shepherd Construction, showed it ran up an £8.2m loss last year as turnover fell by a third to £240m.

Its Shepherd Engineering Services business performed better, making a £5.3m profit as turnover rose eight per cent to £208m.