First Minister Mark Drakeford said the financial £500m lifeline being sought by Tata Steel to get through the Covid-19 pandemic, would have to be a matter for the UK Government.
The Indian-owned steelmaker is reportedly seeking a huge finance package to make up a shortfall in revenues with many of its major customers, such as car makers, having temporarily shut down.
Its primary steel making business in Port Talbot directly employs around 4,000.
A Tata spokesperson said: "We continue to work with both the UK and Welsh governments to identify what support is available.”
Those discussions are at any early stage. However, it is unclear whether Tata could be funded by the UK Government under the Bank of England’s Coronavirus Corporate Financing Facility for large companies with the required investment grade credit ratings. This sees the bank acquiring commercial paper (debt) issued for up to one-year maturity by large firms making a material contribution to the UK economy.
Tata, which employs around 8,000 across the UK and includes down stream businesses in Wales at Trostre and Shotton, has forloughed staff. While not able to give a breakdown the majority of those are support staff and not steelmakers.
Mr Drakeford said “We were in discussions with the company [Tata] last week and they continue to emphasis to us how important for example Port Talbot is to them as a company. We have always demonstrated in Wales our willingness to support the steel industry. We were there with practical help in 2016 when there was a crisis in steel production, but the scale of the global challenge to steelmakers everywhere means that the UK Government has to step into this space.
“So, if there are very specific and local things that need to be done at Welsh-based sites, and things that happen in Wales, we continue to talk about the help we could provide. However, a £500m investment in the industry is beyond anything the Welsh Government could muster and that’s because the problems that £500m seek to address are not Welsh specific problems, but to do with the global crisis facing the industry.”
