UK Government may Co-invest to save Port Talbot Steelworks

UK steelThe Business Secretary, Sajid Javid, has told the House of Commons the Government would consider co-investing with a private sector partner to help save the Port Talbot steel works.

Sajid Javid said the Government was working very hard to find a buyer for the South Wales plant, which is being sold by Tata Steel.  Among options being considered was “the possibility of co-investing with a buyer on commercial terms.”

The Business Secretary said that the sale process for Port Talbot had only just started, but all options are still being explored and at least one potential buyer has expressed an interest.

Mr Javid said, “This included investment or funds from Government.  But it has to be on commercial terms.  I’ve been in contact with potential buyers, making clear that the Government stands ready to help.

“Several weeks ago Tata told me in confidence that they were seriously considering an immediate closure of Port Talbot, not a sale, a closure.  That would have meant thousands of hard-working men and women could already be out of a job.

“Thousands more would have been facing a very bleak future.  I was not prepared to let that happen.”

Tata’s sale of its European long products unit will safeguard 4,800 jobs in England and France at a time when European steelmakers are struggling to survive amid a wave of cheap imports from China.

Greybull Capital said it was arranging a £400m investment package as part of the deal.  The business will be rebranded as British Steel once the deal is completed in eight weeks, it said.

The new business will include the Scunthorpe works, two mills in Teesside, an engineering workshop in Workington, a design consultancy in York, a mill in Hayange, France, and sales and distribution facilities.

Greybull partner Marc Meyohas said he was “delighted” with the agreement and believed the division could become a “strong business.”

He also said Greybull had not ruled out buying other parts of Tata’s UK steel business.  The Long Products Europe business makes steel for the rail and construction sectors.

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