British government ready to buy 25% of Tata Steel in rescue deal
The move comes after Tata decided to sell its UK business, leaving the country struggling to save a declining industry.
The United Kingdom government has said it will buy a 25% stake in any rescue plan for Tata Steel UK, an attempt to save the loss-making mills from closing. It announced it was preparing a support package going into “hundreds of millions of pounds” for whoever buys Tata Steel, which includes the UK’s biggest steel plant in Port Talbot. Tata had announced last month that it was exiting the UK, leaving the government in a battle to save its steel industry. The announcement came after a long-running crisis in the industry, which has been blamed on cheap imports of Chinese steel, high energy costs, and low demand, The Guardian said.
The Port Talbot plant employs around 4,000 workers, and Tata Steel’s move could affect 15,000 employees. Tata Steel said it had spoken to around 190 potential investors for its UK businesses. The government had earlier said that nationalisation of Tata Steel was not an option. However, spokesperson for Prime Minister David Cameron said, “If we were to take an equity stake it would be a minority one with the aim of supporting the purchaser in delivering a long term future for the business. We are certainly not seeking to be controlling the company.” Manufacturers have welcomed the decision.
Liberty House, owned by businessman Sanjeev Gupta, German industrial conglomerate ThyssenKrupp and private equity firm Greybull Capital are likely to be the potential bidders for the assets, The Times of India reported.