TATA Steel, which is Indian owned and Britain’s largest steelmaker, has confirmed it is seeking government support amid reports it is close to securing a bailout worth hundreds of millions of pounds helping to save about 8,000 UK jobs.
“We have been, and continue to, seek government support in the UK… and all geographies we operate in,” Tata said.
Tata Steel added, “it would not be appropriate to comment on ongoing discussions with governments.”
According to press reports the bailout would take the form of a loan that could be converted into equity at a later date, should Tata be unable to repay. Also, Tata would be expected to sign up for various commitments to its workers and cutting carbon emissions as part of any deal.
This could result in the government potentially taking a stake in British steel for the first time in 30 years.
It has been apparent for some time that the steel industry was suffering before COVID but demand for steel has now declined.
Tata Steel commented that “it would not be appropriate to comment on ongoing discussions with governments.”
The government said it was “in regular discussions with companies across a range of sectors”. Adding, “We do not comment on the commercial or financial affairs of individual companies,” it added.
The loan would support Tata Steel’s UK operations, which include its main Port Talbot plant in Wales, but also sites elsewhere in Wales, Hartlepool, and Corby.