Government pledges cash to Tata buyers
HUNDREDS of millions of pounds of taxpayers money is to be made available on commercial terms to potential buyers of Tata Steel.
The announcement follows a second meeting between Business Secretary Sajid Javid and Tata Global chairman Cyrus Mistry this week in Mumbai where progress on the sales process was discussed.
Tata is selling its entire loss-making UK business and has asked for expressions of interest as part of the negotiation process.
The finance package will be tailored to the purchaser’s strategy and financing needs. However, it is expected that all, or the large majority, will be through the provision of debt financing.
The government says it is working with Tata Steel and the British Steel Pension Scheme’s trustees to find a solution that will help minimise the impact of Tata’s pension liabilities on a potential purchaser.
Business Secretary Sajid Javid said: “This government is committed to supporting the steel industry to secure a long-term viable future and we are working closely with Tata Steel UK on its process to find a credible buyer. The detail of our commercial funding offer is clear evidence of the extent of that commitment.
“Ministers have visited Tata Steel sites across the country and the pride and dedication of the highly-skilled men and women working there is obvious to see. We have already delivered on energy compensation, on tackling unfair trading practices and on procurement of British steel, and we will keep on going further to support this vital industry.”
In addition to the support package, the UK and Welsh governments said they would also be willing to consider additional grant funding support, for example to support the development of power plant infrastructure, energy efficiency and/or environmental protection measures, R&D and training.
The European Investment Bank has also stated that it recognises the diverse challenges facing European steel companies and “stands ready” to consider possible financing for new investment in the UK steel industry on the basis of specific proposals.
The British Trades Union Congress (TUC) said the rescue package is “an important first step.”
General secretary Frances O’Grady said: “This is a welcome recognition by ministers that they must act to guarantee the future of UK steel.
“While today’s announcement is an important first step, any rescue deal has to ensure that jobs are protected. As ever, the devil will be in the detail.
“If the steel industry is to be viable in the long term, the Business Secretary must support the European Commission’s efforts to tackle China’s dumping of cheap steel.”
She added: “The government needs to stop blocking EU proposals to raise tariffs. We simply cannot afford any more delays in dealing with this problem.”
