The company that runs Port Talbot steel works has reportedly presented plans for the UK Government to take a stake in the business to safeguard its long term future.
Indian owned Tata Steel is reported to have made overtures to the UK Government to put in almost £1bn in return for up to 50% equity. This would effectively semi-nationalise the Britain’s largest steel maker.
Sky News reported that source close to Tata Steel would also involve its parent company writing off an equivalent quantity of debt owed to it by the UK business.
The steel works is the lifeblood of the Port Talbot community with over 4,000 jobs – many of which are very highly skilled and paid.
According to Sky it is currently unclear if the plans have been well-received by the Treasury and the Department for Business, Energy and Industrial Strategy.
When approached by WalesOnline the UK Government refused be drawn on whether it had received the proposals.
A UK Government spokesman said: “The UK Government has put together a far-reaching package of support to help businesses through the coronavirus pandemic.
“We continue to regularly engage with businesses across all sectors, including those in the steel industry.”
Back in April Tata Steel had requested a £500m loan for the UK Government to manage the downturn in demand following the coronavirus crisis.
It was suggested that this plan was rejected on the basis that it was not accompanied by credible proposals for a transformation of the UK operations whose future has been in doubt several times in the last few years.
The Welsh Government has said it does not have the financial firepower to support the Port Talbot facility without UK Government help.
Just last week WalesOnline reported how Tata is potentially looking at plans to close both its two blast furnaces at the Port Talbot plant and replace them with electric arc furnaces, which would signal the end of primary steel making in South Wales.
It is feared the move would see mass job losses at the steelworks which account for nearly half of all employment in Port Talbot.