Tata Steel U.K. Said To Seek £500 Million Bailout To Survive Coronavirus Lockdown
The U.K. arm of Indian steelmaker Tata Steel Ltd. is seeking an estimated £500 million in government financial package to survive the coronavirus lockdown period, according to U.K. media reports.
The Tata Group firm, which owns the U.K.'s largest steelworks in Port Talbot, Wales, is holding discussions with the Welsh government as well as the U.K. Treasury as it seeks the £50-million cap set on loans being offered under the U.K.'s Coronavirus Large Business Interruption Loan Scheme to be lifted.
"We continue to have ongoing discussions with Tata Steel about what support it needs to sustain a strong steel making presence in the UK and in Wales," a spokesperson for the Welsh government said.
Tata Steel employs 8,385 people in the U.K., including 4,000 people at Port Talbot and 2,800 in other parts of Wales.
"We continue to work with both the U.K. and Welsh governments to identify what support is available," a company statement said.
According to Sky News, the support sought is largely understood to comprise a commercial loan that would be repayable when demand for steel recovers. The £500 million figure is said to be a "ballpark" estimate of the company's funding needs.
"The £50 million cap on loans that are now available under the government support scheme is only about 10 percent of what Tata Steel actually needs," said Opposition Labour MP Stephen Kinnock, whose constituents make up much of the steel workforce at Port Talbot.
"Tata Steel estimates that it will take around six months to get back to business as usual, or as close as possible to it and the challenge they have is cashflow over that six month period. And the estimation is in the region of £500 million," said Kinnock, who had also raised the issue in the House of Commons earlier this week.
Responding to him, First Secretary of State Dominic Raab, who is standing in for British Prime Minister Boris Johnson while he recuperates, said that U.K. Chancellor Rishi Sunak is looking “carefully” at the steel sector.
“All those who are not directly benefiting from this particular scheme (CLBILS) to ensure that in the round we are providing the measures that we need in a targeted way to support all the different crucial elements of the economy," Raab said.