The UK government on Thursday announced it is willing to acquire 25 per cent minority equity stake in Tata Steel’s UK operations as well as offer “hundreds of millions of pounds” in debt relief to rescue the troubled Indian steel giant by helping potential buyers.
UK business secretary Sajid Javid said the financial package, being jointly worked out by the UK and Welsh governments, said the government was “working closely with Tata Steel UK on its process to find a credible buyer”.
“We would work alongside a potential buyer to make sure that the government is doing what it could to support a viable sale,” British Prime Minister David Cameron’s spokesperson said at a media briefing.
“If we were to take an extra 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,” said the spokesperson.
Dismissing the move being perceived as part- nationalisation of the steel industry in the UK, she added: “I am not sure (if) we would accept the concept of part- nationalisation. We will be investing on a commercial basis.
“We would not see this as nationalisation. We would not be seeking to acquire a control in the business. We don’t think that nationalisation is the right answer.”
Besides a minority stake, the UK and Welsh governments are considering additional grant funding, which could involve support for the development of power plant infrastructure, energy efficiency and environmental protection measures, R&D and training.
The government also said it was working with the pension scheme trustees of Tata Steel and British Steel to minimise any pension impact on the purchaser.
“This government is committed to supporting the steel industry to secure a long-term viable future and we are working closely with Tata Steel UK on its process to find a credible buyer.
“The detail of our commercial funding offer is clear evidence of the extent of that commitment,” said Javid, who had earlier this month rushed to Mumbai for talks with Tata Steel officials.
“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,” he added.
The Britain’s biggest steelmaker earlier this year announced thousands of job cuts as part of its broader cost- reduction plan for its business amid “unfair” steel imports from China.
The proposed changes followed continued falls in the European steel price caused by a flood of cheap imports, particularly from China, the company had said. .