A state loan would be a major support package, as Britain’s largest steel manufacturer, Tata Steel awaits a government decision on a rescue deal.
Welsh-based Tata seeks around £500m in government support to help it survive. It is a candidate for a loan under the Treasury’s ‘Project Birch’ scheme, which considers bailouts as a last resort for vitally important companies.
The project involves Treasury officials studying options for the government to step in and support companies, aimed at preventing a mass of job losses in the sectors of the economy worst hit by the pandemic. Companies unable to borrow more money would be offered taxpayer support.
Tata has been told that the decision is imminent, however, they are still in talks.
They came under financial pressure when the pandemic spread, leading to business coming to a stand still, although they had also had previous issues, as there was a drop in demand for steel across the EU, and they had already made plans to cut 3000 jobs across Europe.
If the government was to take equity, stakes could be sold for businesses to recover.
The Indian conglomerate- Tata planned to sell its UK business a few years ago but eventually decided to keep its British plants and to invest £1 billion in upgrading them.
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