Tata Steel denies sale reports after UK Government ends bailout talks

Tata Steel has played down reports that the company is up for sale following the breakdown of bailout talks with the UK Government recently.

Over 8,000 people in the UK work for Tata and 4,000 of those are employed at Port Talbot, the largest steelworks in the UK.

The company had been seeking several hundred million pounds of financial support and offered a stake in the company in an effort to secure funds from the government’s Project Birch scheme, a programme that was launched to help “strategically important” companies that have taken a severe financial hit due to the Covid-19 pandemic.

According to the Financial Times, citing unnamed sources, talks between the UK Treasury and Tata Steel were halted after the government concluded the Indian multinational was sufficiently financed and didn’t qualify for taxpayer support.

Tata remain in talks with the government on other areas of potential support like tax breaks, which could extend to state loans, the FT said.

A spokesman for Tata Steel said: “We remain in ongoing and constructive talks with the UK government on areas of potential support.

“As these discussions have not reached a conclusion, it would be premature to comment on any options that may or may not be under consideration.

“In the meantime, we will not respond to speculative and inaccurate media reports about the future of our operations in the UK or elsewhere.”

Meanwhile, the Telegraph of India is reporting that the Liberty Group is interested in acquiring Tata Steel UK’s assets.

Liberty Group founder Sanjeev Gupta, who bought Tata Steel UK’s speciality steel business for £100 million three years ago, told the newspaper “We will look at any steel assets, not only Port Talbot, that may come our way in the markets we operate in.”

Gupta is executive chairman of UK-based GFG Alliance which includes Liberty Steel and is one of the top-10 producers outside China with operations in the UK, Europe, and Australia.

Analysist are predicting Tata faces a decline in revenue of up to 35 % in the last quarter due to falling demand for steel due to the coronavirus pandemic and the business is seeking to implement world-wide cost-cutting measures of £2.5 billion and cut thousands of jobs.