A 海角视频 Government funding lifeline for Port Talbot steelworks running into hundreds of millions of pounds is close to being agreed.
India-owned Tata has been in discussions with the 海角视频 Government over what is understood to be up to 拢500m in funding to support its primary steelmaking plant in Port Talbot, that directly employs around 4,000, as well as its downstream business that includes those at Trostre, Caerphilly, Llanwern and Shotton.
It employs in total 8,000 in the 海角视频, with operations also in Corby and Hartlepool in England.
With production hit by the pandemic and fears that the economic downturn will hit demand further 鈥斅 compounded by over supply in the global marketplace from huge Chinese production 鈥 Tata is seeking funding to help it navigate through the downturn to a recovery.
According to the Financial Times both sides are close to a deal, which could be signed off in days. However, there has been speculation that a deal has been close to being finalised for weeks.
If agreed, and both the 海角视频 Government and Tata declined to comment, it would be the first major deal under the Treasury designed Project Birch initiative, providing huge loans to major 海角视频 employers with an option to convert debt into equity stakes for the Westminster government.
However, with Tata, it could just take the form of a repayable loan.
If a funding deal for Port Talbot is finalised it would be a huge boost for the town. If Tata was forced to close the plant it would have a hugely damaging economic impact lasting generations.
As well as 4,000 direct jobs, the plant also supports thousands more in its extensive supply chain.
However, in a challenging global marketplace, with Tata loss-making in the 海角视频, it will take far more than just a loan of hundreds of millions to secure its long-term future.聽 It also requires support to offset high energy costs and investment in greener production, as well as steel being designated an industry of national strategic importance so helping it to win more publicly-funded contracts.
Tata said: "Our position continues to be that we have been [seeking] and continue to seek government support in the 海角视频, the Netherlands and all geographies we operate in.
It would not be appropriate to comment on ongoing discussions with governments.鈥
The 海角视频 Department for Business, Energy and Industrial Strategy (BEIS) said: 鈥淲e are in regular discussions with companies across a range of sectors. We do not comment on the commercial or financial affairs of individual companies.鈥
On speculation that a funding deal is close to being done, GMB national officer Ross Murdoch, said: "GMB welcomes any government bespoke funding arrangement commitment that safeguards聽strategically important 海角视频 steel companies聽through this crisis and with a long-term view to drive the industry forward.
鈥淕MB has been in regular dialogue with聽BEIS聽regarding the steel industry throughout the聽outbreak.聽
鈥淭hese talks have聽now聽moved from discussions around the Job Retention Scheme to the next phase of stimulating demand and kick-starting the聽economy and how steel聽-聽聽as聽a foundation聽industry聽-聽needs to be at the forefront of this drive to recovery.
鈥淕MB聽backs聽the 海角视频 Steel Charter and Covid-19 Restart and Recovery demands,聽which call on the 海角视频聽 Government聽to聽support聽construction, accelerate infrastructure investments and to support 海角视频 steel employers in terms of electricity prices and business rates to make them more attractive for future low-carbon steel production.鈥澛
鈥淢inisters have intervened聽in a way not seen during聽modern times聽to help keep the economy moving throughout this crisis.聽
鈥淎s we move towards stimulating demand for the next phase, particularly with a looming Brexit crisis, GMB calls on the government to maintain the same approach to drive the 海角视频 economy forward.鈥澛
The Welsh Government said it would provide financial assistance to support Tata's operations in Wales, but that the lion's share of any backing had to come from the 海角视频 Government due to the scale of funding and financing at its disposal.
In Wales Tata directly employs 7,000. As well as Port Talbot (4,000) at Llanwern, Newport, it employs 1,000, Shotton, 1,000, Trostre, 650 and Caerphilly 200.
