UK unveils financial support plan for Tata Steel buyer

21st April 2016, Comments 0 comments

The British government on Thursday announced plans to provide financial support totalling "hundreds of millions of pounds" for potential buyers of crisis-hit Tata Steel's UK operations.

"A package of support worth hundreds of millions of pounds will be made available on commercial terms to potential buyers of Tata Steel UK," said a statement from the Department for Business, Innovation & Skills.

It added that the announcement followed a second meeting between Business Secretary Sajid Javid and Tata Global chairman Cyrus Mistry this week in Mumbai, where the sales process was up for discussion.

Most of the financial support is expected to be through the provision of debt financing, according to the statement.

Other options include providing hybrid or alternative forms of financing and supporting a purchaser's financing by taking a minority equity stake of "up to 25 percent" to support any sale.

Under such a move, however, the government stressed that it "will not acquire a material element of control over the business".

The British government was thrown into crisis in late March when Tata Steel unexpectedly put its British business up for sale, sparking calls for state intervention to safeguard 16,300 jobs.

© 2016 AFP

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