Support package announced for potential buyers of Tata Steel
A support package worth hundreds of millions of pounds is going to be offered to potential buyers of Tata Steel.
A support package worth hundreds of millions of pounds is going to be offered to potential buyers of Tata Steel.
The UK and Welsh Governments made the announcement this afternoon.
The move follows another visit to Mumbai by Business Secretary Sajid Javid to meet Tata's chairman Cyrus Mistry on Tuesday, where the minister said progress on the sales process had been made.
The Business Department said the financial support package will be tailored to the buyer's strategy and needs.
The Government says it's prepared to take a minority stake of up to 25 per cent to support a sale. Other options include debt financing or alternative forms of financing.
The Business Secretary 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."
On top of the support package, the UK and Welsh governments said they will also be willing to consider additional grant funding support, for example to support the development of power plant infrastructure, energy efficiency and training.
Terry Scuoler, Chief Executive of EEF, the manufacturers' organisation, said: "This is a welcome and extremely positive statement of intent.
"The Government has said that it is committed to the importance of the steel sector in the UK as a strategic national asset and this announcement shows that it is prepared to put money and action in place to back its words."
The announcement has been blasted by think-tank the Adam Smith Institute though.
Ben Southwood, Head of Research, said: "Stepping in to part-nationalise Port Talbot and other Tata Steel operations in the UK, as well providing hundreds of millions of pounds of debt finance, will make Britain poorer in the long run and keep steelworkers dependent on state aid for the foreseeable future.
"If no buyer has approached at the market price, this means that the people who know the steel industry best have judged that Britain's steel sector is not viable in the long run. Sweetening the deal with government guarantees could mean permanently propping up an unproductive industry when the world is moving away from the sort of blast furnace steel production that Port Talbot has.
"If there is to be state intervention, it should at least support industries that have a long term future."