Tata Steel Considers UK Nationalization Plan

Tata Steel has been submitting proposals to Whitehall in recent weeks to secure government funding of around £ 1bn in its UK operations. In turn, the Indian parent company will hand over to British taxpayers a stake of up to 50%, which would mean the semi-nationalization of Britain's largest steelmaker as it grapples with the fallout from the coronavirus pandemic. A source close to Tata Steel said the proposal, just one of the options the company is exploring, suggests that its parent company is writing off an equivalent amount of debt to the UK business. Negotiations are at a preliminary, not a specific stage, and the structure of any transaction, as well as the size of any financial contributions, are still far from complete.

A spokesman for Tata Steel Europe said: “We are actively negotiating with the UK government on several options for the future of our UK operations, including potential government collaboration and involvement to create a sustainable decarbonized footprint for the future. With the prevailing market conditions and the disruptions caused by the COVID-19 pandemic, it is clear that our operations in the UK are facing structural challenges that need to be addressed urgently. therefore, it would be inappropriate to comment on unfounded assumptions about the outcome of these discussions or the potential impact of any changes to ensure our sustainable long-term future. If and when we make progress in reporting, we will first inform our employees and consult with our employee representatives. "

Discussions between officials and the company are part of Project Birch, which was opened by Sky News shortly after UK localization caused havoc for millions of companies in sectors such as aviation, hospitality, manufacturing and retail. Since then, a government-sponsored financial support program for companies of strategic national importance has provided Celsa Steel, a subsidiary of Cardiff-based Spanish steelmaker Celsa, a major supplier to the UK construction industry, with only one loan of £ 30 million ... Other steel producers, including British Steel, which is now owned by China's Jingye Group, have also turned to taxpayers for financial help since the onset of the COVID-19 crisis.