ANNOUNCEMENT 21 Apr 2016

In April 2016, the British government announced a change in private-sector financial support.

NUMBER OF INTERVENTIONS

1

  • 0 harmful
  • 1 neutral
  • 0 liberalising
Inception date: No inception date

State loan

 On 21 April 2016, the UK government announced it would provide financial support to a potential buyer of Tata Steel UK.
The government promised "hundreds of millions of pounds" after talks with the CEO of Tata Steel UK which had previously announced a potential divestment of the UK subsidiary of Tata Steel Europe.
According to the press release, would include:

  • "providing hybrid (convertible debt) or alternative forms of financing
  • supporting a purchaser's financing by taking a minority equity stake (up to 25%) acting in support of the purchaser; however, government will not acquire a material element of control over the business".

Furthermore, the English and Welsh governments offered "additional grant funding support, for example to support the development of power plant infrastructure, energy efficiency and/or environmental protection measures, R&D and training".
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.
 
Update 1
On 9 May 2016, seven companies expressed interest in buying the subsidiary and were forwarded to the next stage of bidding. On 8 July 2016, however, Tata Steel Europe announced in a press release (cf. Sources) that it would put the sale of its UK subsidiary on hold. Instead, it is considering to create a joint venture with thyssenkrupp AG over the whole European section of Tata Steel. It remains unclear whether the joint venture will take place and what will happen with the offer proposed by the English and Welsh governments. The press release merely mentioned that the company "continue's' to be actively engaged with both the UK and the Welsh Governments, the trade unions and the Pension Trustees".

AFFECTED SECTORS