The government has announced that it is willing to take a minority stake in Tata Steel’s UK operations in order to attract a buyer for the business.
If a buyer cannot be found in the near future, Indian steel giant Tata may close down its remaining UK operations, costing tens of thousands of jobs. This has prompted the UK government to announce support for potential new buyers (1).
Business secretary, Sajid Javid, announced a new package yesterday entailing support amounting to hundreds of millions of pounds, including loans, grants and a possible equity stake (2).
UK and Welsh governments jointly declared that they would consider an equity stake of up to 25% in the steel plants (2).
The UK operations are currently losing £1m per day and Tata has stated that it wants to sell up “in a time bounded way” (3).
Tata have stated that the disposal of its UK operations is an exercise in exposure reduction (4), illustrated by the sale of the Scunthorpe site to Greybull Capital for a nominal £1 (3).
Two possible buyers have emerged, the first a management buyout backed by the chief of Tata’s Port Talbot factory. Steel company Liberty House have also expressed interest in buying parts of the business. (3).