The UK and Welsh Government have revealed a plan to support potential buyers of Tata Steel's UK plants.
A package of support has been confirmed by the government today that is worth hundreds of millions of pounds available to buyers of Tata Steel. The announcement comes after Business Secretary Sajid Javid met with Tata global chairman Cyrus Misty in Mumbai.
The Government has pledged to support a credible private buyer by purchasing a minority stake of up to 25%. The support package will be tailored to the purchaser’s financial needs and strategy, and could also include options such as convertible debt or alternative forms of financing.
The Government is working with Tata Steel and the British Steel Pension Scheme’s trustees to try and minimise its impact impact on a potential purchaser and potentially separate it from the business.
Sajid Javid commented: “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.”
First Minister of Wales Carwyn Jones added: “We’re committed to supporting any credible bid to secure steel making in Wales. We have worked with the UK Government to put in place this significant package of support and we believe that this will help secure a successful sale of Tata Steel’s operations in Wales and the rest of the UK.”
This announcement marks the start of the formal sales process that Tata Steel announced last week. The government has also said that it would be willing to consider additional grant funding support to develop the power plant infrastructure, energy efficiency and/or environmental protection measures, R&D and training.
Chief Executive of EEF, Terry Scuoler noted: “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.
“This should put in place the building blocks which should encourage potential investors to come forward to co-invest with Government to ensure a viable future for the steel sector in South Wales and, in the wider UK.”
Director of UK Steel, Gareth Stace added: “We have been calling for Government to step up to the mark and provide this type of financial commitment and backing. This is a positive first step which will provide the certainty and continuity that should enable credible investors to come forward and provide a sound future for steel making in the UK.”
“We are not yet out of the woods however. Further action is still needed on energy costs and business rates whilst at EU level, we still need to see tougher action on the dumping of cheap imports. This will then provide the level playing field which will give UK companies a fighting chance to compete.”