Tata Steel has not ruled out keeping its UK business, including the Port Talbot steelworks, despite having begun the process of selling it and announcing it wants to pull out of the country.
A source close to the Indian company said it was still exploring whether it could afford to keep its UK steel business and fund a turnaround plan, with thousands of jobs on the line as talks continue over a rescue deal.
The news emerged as David Cameron visited the Port Talbot steelworks in Wales on Tuesday to offer his support to Tata employees.
Tata Steel is pressing ahead with plans to sell the business, but that could change if the outlook improves. The government has offered hundreds of millions of pounds to a potential buyer of Tata Steel UK and said it is willing to take an equity stake of up to 25% in the business.
The Tata source said: “When dealing with governments, Tata won’t take things lightly.
“It is currently ‘no’ [it will sell the UK business]. But what happens in a week, two weeks, I don’t know. They are looking at the business plan, bearing in mind steel prices are going up and assuming Chinese dumping can be reduced.
“If they can some way or other bridge the gap they will stay, but at the moment they can’t bridge the gap.”
The government’s commitment to supporting the steel industry has been welcomed by Tata. However, its offer of direct financial support – most likely through low-interest loans – is unlikely to influence any decision by Tata to keep the UK business. This is because Tata has vast financial resources of its own and a string of banks willing to lend money to it.
Tata has contacted almost 200 potential buyers for its UK business, including investment firms and other industrial companies. The most likely saviour to emerge so far is a management buyout backed by the Welsh billionaire Sir Terry Matthews.
The prime minister met managers, union leaders and workers, including the chief executive of Tata Steel Europe, Hans Fischer, and general secretary of the Community union, Roy Rickhuss, in his first visit to the Port Talbot site since the crisis unfolded.
His official spokeswoman said the government wanted to do everything it could to “support a sustainable future for the steel industry”, but said it did not underestimate the scale of the challenge facing the industry.
She said Cameron’s meetings focused on a financial support package for potential buyers, rather than tariffs against Chinese imports, which have been blamed for the pressure on the industry.
“The PM underlined our commitment to working with Tata to support the future of steelmaking in Port Talbot and emphasised the need for the Tata sales process to cover the whole business and for there to be sufficient time for that process to run,” she added.
“The PM has been clear throughout that the government should do all it can to support the sustainable future of steelmaking in Port Talbot.”
Source: The guardian