Loan cut halts Forgemasters plans

SHEFFIELD Forgemasters has suspended its plans to buy new equipment to build parts for nuclear power stations after Ministers stood by their decision to withdraw a multi-million pound loan.

Shortly after taking office the new Government withdrew an offer by its Labour predecessor to support Sheffield Forgemasters with an £80m loan as the company looked to install a new 15,000-tonne press.

Sheffield Forgemasters has now revealed that its board met senior Government officials and financial advisors to consider how the funding gap could be met last week.

However, no solution has been found and the company has put the plans on hold.

Chief executive Graham Honeyman said: “We are still keen to undertake the 15,000 tonne press development but feel that the company’s best interests will be served by suspending work on the project for the time being. The opportunities in global nuclear will continue to grow.

“This pause will give the company, which has invested more than two years and significant funds to this project, time to resume a greater focus on growing our business into civil nuclear and other sectors.”

He added: “The company recognises the difficult financial position faced by the country and accepts the loan offer will not be reinstated.”

The company reviewed options for funding the project from the private sector but decided they were not viable for the company and would not be fair to existing shareholders.

Business Secretary Vince Cable said: “I understand that this outcome is disappointing for the Company and its employees, who have acted very professionally and responsibly throughout.

“I will keep the situation under review and reconvene the meeting of experts with the Sheffield Forgemasters Board when they are ready, to review the investment potential with the company.”