UK government considers stake in steel
12 Apr 2016
Business secretary Sajid Javid said the government was ready to ‘co-invest’ in the ailing steel industry, alongside potential buyers of Tata’s ailing UK business.
In a statement issued yesterday, Javid said: “I’ve been in contact with potential buyers, making clear that the government stands ready to help.
"This includes looking at the possibility of co-investing with a buyer on commercial terms."
I’ve been in contact with potential buyers, making clear that the government stands ready to help. This includes looking at the possibility of co-investing with a buyer on commercial terms
Sajid Javid, business secretary
However, Javid said commercial confidentiality prevented him from disclosing any ongoing discussions.
The formal sale process for Tata Steel’s UK business commenced this week, with the company agreeing to sell its Long Products Europe business to private equity group, Greybull Capital.
The Long Products Europe business employs 4,400 people in the UK, and Greybull Capital has agreed to take on the whole of the business for a “nominal consideration”, including assets and relevant liabilities, and securing an appropriate funding package, Tata Steel said.
It covers the Scunthorpe steelworks, two mills in Teesside, an engineering workshop in Workington, a design consultancy in York, and distribution facilities, but does not include the Port Talbot steelworks.
Government ministers in the UK were locked in talks last week to discuss the potential sale of Tata Steel’s other steelworks, which include the Port Talbot plant, where more than 1,000 jobs have already been cut.
The business secretary also met with Tata chairman Cyrus Mistry in Mumbai to discuss the sale, which could include facilities at Rotherham, Corby and Shotton.
Tata Steel said yesterday that the sale of its Long Products Europe would be completed “once a number of outstanding conditions have been resolved, including transfer of contracts, certain Government approvals and the satisfactory completion of financing arrangements”.
Dave Hulse, national officer of engineering union GMB, welcomed the announcement.
“The joint trade unions have been in negotiations over a long period of time, looking at temporary agreements to make sure that the first 12 months of the sale are successful,” he said.
"Our members must be congratulated for their pure determination in campaigning over the last two years. Their efforts were a major factor in the success of the sale.”
