Tata Steel is believed to be close to striking a deal with the UK government to keep its British steelworks rather than sell it off, which would secure the future of 11,000 workers, UK media reports said today. The Indian conglomerate is in talks to clinch a loan worth nearly 1 billion pounds and a restructuring of the British Pension Scheme after no potential bidder could guarantee keeping the plants running for more than three years.
“They have never stopped negotiating about staying. If everything works out they will stay,” a source close to the company told the Guardian.
UK business secretary Sajid Javid, who is leading UK government efforts to rescue thousands of steel jobs in the country, has previously said the government is willing to offer hundreds of millions of pounds to a buyer of Tata Steel UK and restructure the pension scheme, which has liabilities of almost 15 billion pounds and costs more than 100 million pounds a year to support.
However, it is not clear at this stage whether Tata will take up the government’s offer of taking a 25 per cent stake in the business.
The Mumbai-headquartered firm was said to be “under-whelmed” by the bidders for its UK business, especially the flagship Port Talbot plant in Wales.
Indian-origin businessman Sanjeev Gupta’s Liberty House and London-based investment firm Greybull Capital were among those in the running.
But ‘The Financial Times’ claims none of the bidders could offer a viable ownership of the Port Talbot site.
“Nobody could give them a guarantee that they would stay for more than two or three years. That is one of the reasons Tata has decided to stay. They don’t want to be blamed for selling it short,” a source told the newspaper.
When asked at a press conference last week about keeping Tata Steel UK, Koushik Chatterjee, executive director of Tata, had said the management team was still “looking at continuing and sustaining the business”.