Britain to take 25% stake in Tata Steel UK to support sale
The UK government is all set to buy a minority stake in the Tata Steel's UK business to support the sale
Zee Media Bureau
New Delhi: In the latest, the UK government is all set to buy a minority stake in the Tata Steel's UK business to support the sale. The government is also mulling over a plan to offer monetary help as debt relief if a private buyer can be found.
The UK and Welsh governments have made the offer and will be made available on commercial terms to potential buyers of Tata Steel, the Guardian newspaper said. BBC reported that the government could purchase as much as 25 percent.
The Indian group announced plans to exit its entire British steel operation last month, leaving the government battling to save a once mighty industry that has been hammered by a surge in cheap Chinese imports, soaring costs and weak demand.
The government said the support it provided would be on commercial terms and would depend on the purchaser. It said this was most likely to be debt financing but taking an equity stake was also an option.
"If we were to take an equity stake it would be a minority one with the aim of supporting the purchaser in delivering long term future for the business. We are certainly not seeking to be controlling the company," a spokeswoman for Prime Minister David Cameron said.
The Business Ministry said in a statement the government could take a stake of up to 25 percent in the assets.
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.
"The UK government is actively working with Tata Steel and the British Steel Pension Scheme’s Trustees to find a solution that will help minimise its impact on a potential purchaser, and potentially separate it from the business," the ministry said.
(With PTI inputs)