THE UK Government apparently kept giant Indian steel maker Tata’s loss-making works in Port Talbot, South Wales, from closing with immediate effect last month.
The Government stepped in to “secure a reprieve” when it learnt that the steel plant in Wales was due to close last month, business secretary Sajid Javid told the House of Commons.
Mr Javid told MPs it was “not prudent” to go into details about what support the Government could offer the stricken business, which has been put up for sale by its Indian parent company with 11,000 jobs at risk.
The details emerged during today’s emergency debate in Parliament called by Angela Eagle, the shadow business secretary, about the future of the UK steel industry.
Mr Javid told MPs: “Investors know British steel is the best in the world, British steelworkers are the best in the world, and the government stands with the industry.”
On Monday (11 April), Mr Javid raised the possibility of the state “co-investing” in the Tata’s UK business “on commercial terms”.
Unions have said that keeping Tata’s UK plants open is of the utmost importance as it will help them retain customers and make the business more attractive to potential buyers.
The debate was called amid Labour attacks on the Government for its handling of the crisis. Mr Javid had to return to the UK from a trip to Australia with his daughter to deal with Tata’s announcement it was selling the strip steel business.
A spokesman for Ms Eagle said: “The Government did not recognise the crisis that has been building up. It looks like ineptitude, but we think it was more a case of ideology with them reluctant to be seen to be interfering in the market.”
Tata, meanwhile, has received “tens” of expressions of interest in buying its troubled British strip steel business since launching a sale of the loss-making business earlier this week.
The company has prepared an information memorandum for possible buyers that it is keeping secret citing the commercially sensitive information it contains.
However, it is understood that the business for sale had an annual turnover of £2bn.
Khoushik Chatterjee, group executive director, confirmed reports that Tata’s steel business – excluding the long products operation, which was sold to turnaround investor Greybull on Monday (11 April) – was losing in the region of £1m a day.
The strip steel business has operations in Canada and Sweden making steel for electrical use which are also part of the sale.
The memorandum also includes details about the biggest customers for the business. The largest sector it deals with is automotive, with “hundreds” of customers in the UK and abroad, though they are understood to represent less than 50 per cent of output.
Tata’s next largest customers are the construction, packaging and aerospace sectors. The company said it was now passing on expressions of interest to its M&A team, who will sift through to decide which are credible. Tata has also said it will actively contact about 100 groups it sees as possible buyers. These are spread around the world and include both trade buyers and financial investors.