Reports: U.K. Government May Loan Tata Steel Millions to Keep It from Leaving
06/03/2016 - Tata Steel, which in March announced that it no longer thought it could make steel profitably in the U.K. and would exit the market, may not leave after all.
Instead, the company might work out a deal with the U.K government to hold onto its strip business and continue operating the integrated Port Talbot works, the country’s largest steel works.
According to The (London) Financial Times, Tata turned to the government and asked for incentives to stay after failing to receive assurances from any prospective buyers that they would keep Port Talbot open for more than three years.
The newspaper said the loan is worth is several hundred million pounds. The Guardian newspaper put the value of the loan at up to 1 billion pounds and said it would be on commercial terms. A spokesperson for the country’s Department for Business, Innovation and Skills declined comment, The Guardian said.
The newspaper reported that although Tata is working through a sales process for the business, it was encouraged to consider retaining it by an incentive package the government put together for potential buyers.
“They have never stopped negotiating about staying. If everything works out they will stay,” an unnamed source reportedly close to Tata told The Guardian.
Another report, however, contradicted the talk that a government deal is in the offing.
An anonymous source reportedly close to U.K. Business Secretary Sajid Javid told The (London) Telegraph that such a loan was “nonsense.”
And bidders told the newspaper they doubted reports that Tata turned to the government for help after failing to win any promises from potential buyers to keep Port Talbot open for more than three years.
“The plans we have for Port Talbot would take at least three years to put in place,” a source reportedly close to one bidder told The Telegraph.
According to The (London) Financial Times, Tata turned to the government and asked for incentives to stay after failing to receive assurances from any prospective buyers that they would keep Port Talbot open for more than three years.
The newspaper said the loan is worth is several hundred million pounds. The Guardian newspaper put the value of the loan at up to 1 billion pounds and said it would be on commercial terms. A spokesperson for the country’s Department for Business, Innovation and Skills declined comment, The Guardian said.
The newspaper reported that although Tata is working through a sales process for the business, it was encouraged to consider retaining it by an incentive package the government put together for potential buyers.
“They have never stopped negotiating about staying. If everything works out they will stay,” an unnamed source reportedly close to Tata told The Guardian.
Another report, however, contradicted the talk that a government deal is in the offing.
An anonymous source reportedly close to U.K. Business Secretary Sajid Javid told The (London) Telegraph that such a loan was “nonsense.”
And bidders told the newspaper they doubted reports that Tata turned to the government for help after failing to win any promises from potential buyers to keep Port Talbot open for more than three years.
“The plans we have for Port Talbot would take at least three years to put in place,” a source reportedly close to one bidder told The Telegraph.
