The British government has hired Credit Suisse to create a rescue plan to save Tata Steel UK after its parent company confirmed that it was unwilling to bear financial losses from its UK operations.
According to media reports, the UK Treasury has tasked Credit Suisse and McKinsey as a consultant with advising on Tata Steel to “draw up a blueprint for the future of the UK’s wider steel industry.”
Tata’s talks with the authorities were reported to have ended abruptly last month after the latter concluded that the Group was sufficiently solvent and failed to meet the criteria for access to £900mn in exchange for a 50% equity stake in the UK business.
However, the appointment of Credit Suisse – who are working on a pro bono basis – might end speculations that negotiations between the Bristish government and the Indian company had ended prematurely.
Tata Steel UK operates two blast furnaces at its integrated Port Talbot steelworks, capable of producing 5mn mt of crude steel, which also manufactures slabs, hot rolled, cold rolled and galvanised coil.