Sajid Javid will meet the boss of Tata on Friday for an update on the Indian conglomerate’s plans for its UK steel business amid growing uncertainty about the sale process.
The business secretary is in Mumbai, where Tata is due to hold its monthly board meeting, and will hold talks with Cyrus Mistry, Tata’s chairman. Tata may announce that the sale of Tata Steel UK has been put on hold.
Tata announced plans to sell its UK steel operation in late March, putting 11,000 jobs at risk, including 4,000 at the strip products business in Port Talbot, south Wales. It blamed cheap Chinese imports, the depressed price of steel and high energy costs for the decision to sell the business it bought in 2007.
When the sale was announced the business was said to be losing £1m a day but cost-cutting, a partial recovery in the steel price and the pound’s plunge on currency markets have made the business more viable.
The UK government has promised a package of support including a loan of up to £1bn and possible joint ownership. About 40,000 jobs are thought to rely on the business, including those in its supply chain.
Some bidders have pulled out due to the economic uncertainty following Britain’s vote to leave the EU, Bloomberg reported, although Javid’s department apparently has not been told about any withdrawals.
The situation has been further confused by Tata considering the sale of its speciality steels and pipeline tube businesses if it decides to stay in the UK. The operations employ 2,500 people in Rotherham, Hartlepool and Stocksbridge, near Sheffield.
Stephen Kinnock, the Labour MP whose Aberavon constituency includes Port Talbot, has called on Javid and Tata to clear up questions about the sale process and set clear objectives. He has demanded that Javid make a statement to parliament on Monday when he returns from India.
Javid was left embarrassed in March because he was in Australia when Tata announced the sale, while Kinnock and trade unions travelled to Mumbai in an attempt to persuade the company to keep the UK business open. He flew to Mumbai to meet Mistry in early April and again in May, when the company was compiling a shortlist of bidders.
