After what has been a long, fraught and very public sale process of selling off their UK steel production businesses, the public might well be pleased to see the back of Tata Steel. However, if the latest rumours prove to be true, it could be that Tata keep their Port Talbot plant after all.
Reports suggest that the Indian company is close to a deal with the Government which would mean a stay in the UK, despite the fact that they’re deep into the sales process for their entire UK business, which presently employs around 11,000 people in the UK. They’re currently in talks about a loan worth up to £1 billion and a restructuring of the British Steel pension scheme, which would sale billions of pounds in liabilities for the company. They’re said to have been impressed by the potential package that the Government would offer to businesses who bought the plant, and are now keen to remain.
At the same time, Tata Steel are seeing whether potential bidders would be interested in purchasing two of its divisions – speciality steels and pipeline tube, should they choose to remain in the UK. These two divisions employ roughly 2,500 people at sites in Rotherham, Hartlepool and Stocksbridge, but do not include the Port Talbot plant, where the majority of Tata’s workforce are employed. If the speciality steels business rings a bell, that’s because it’s being investigated by the Serious Fraud Office over allegations of forgery.
A source close to Tata Steel told the Guardian that the company was examining all options, but that nothing had been distracted. However, they did comment that Tata was close to an announcement that they’d keep their UK operations. “They are most likely to keep it”, the source said.
On the government’s end, they’re refraining from sharing an opinion on a potential Tata deal, saying “The government is focused on a long-term future for Port Talbot, which keeps blast furnace steel production in the UK, and we are committed to a credible sales process.
“We have set out our high-level offer on commercial funding and we are working on other areas to reach the best long-term outcome for the industry, workers and the supply chain. That includes ports and infrastructure, power and pensions.”
If Tata were to keep the plant, it would mean a large restructuring of the pension scheme already in place. It’s regarded as a significant hurdle to the rescue deal, with the latest figures showing a deficit of £700m, up from £485m last year. The government’s own estimates put the cost of buying out the plans benefits at £7.5bn.
What exactly happens with Tata’s Port Talbot is still up in the air, with bids lodged by Greybull Capital, who recently bought the Scunthorpe plant and rebranded it as British Steel. Nevertheless, we could be in for another twist in the tale.
Here at Custom Fittings, wish everyone at Port Talbot the very best