Government could take 25% stake in Tata Steel rescue deal

21 Apr 16

The government would be prepared to take a stake of up to 25% in a takeover deal for the UK business of Tata Steel, Sajid Javid has announced today.

Javid said the government could provide up to hundreds of millions of pounds to support a buyer for the operations, including the plant in Port Talbot in Wales, that were put at risk last month. The firm announced it would close the operations if no buyer can be found.

Support from the UK and Welsh governments would be made available on commercial terms, he said, while additional grant funding would also be on offer.

A minority equity stake (up to 25%) could be taken to support a purchaser’s financing, he added, but the government would not acquire a material element of control over the business.

In addition, ministers are working with Tata and the British Steel Pension Scheme’s Trustees to find a solution that will minimise the impact of pension liabilities on a potential purchaser.
Javid said the government was “committed to supporting the steel industry to secure a long-term viable future”.

“The detail of our commercial funding offer is clear evidence of the extent of that commitment,” he added.

“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.”

Others including the European Investment Bank have also said they stand ready to consider possible financing for new investment in the UK steel industry on the basis of specific proposals.

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