The sale of Port Talbot steelworks paused
Tata Steel is expected to announce tomorrow that the sale of Port Talbot steelworks and most of its UK business will be paused.
The sale of Tata Steel’s Port Talbot steelworks and most of its UK businesses will be paused due to the rising steel prices and a raft of government incentives.
The sale of its speciality steel making business, which employs 2,000 employees in Hartlepool, Rotherham and Stocksbridge will proceed.
The original plan was to sell the plants quickly in order to avoid uncertainty for the workers. However, due to the increased prices which has reduced pressure on its Indian owners to sell and government incentives, Tata has now slowed down the process, leaving the future of the rest of the 9,000 workers unclear.
Tata Steel UK is now in profit by an estimated £15M in the last quarter.
Government incentives to keep the business going have been offered in high quantity. The government have offered hundreds of millions of pounds worth of loans and the taking of a potential 25% stake in the business.
One of the biggest obstacles to a sale is the legacy of the British Steel Pension fund, which Tata inherited when it bought the business in 2007. It has 130,000 members and a deficit of £700M.
Business Secretary Sajid Javid will meet the Chairman of Tata Steel, Cyrus Mistry in Mumbai on tomorrow ahead of a Tata board meeting.
Tata says it is considering the options, and assessing the impact of the UK’s Brexit vote on the UK steel industry.
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