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Tata Steel to put sale of British assets on hold

Jul 07, 2016, 8:46 AM EDT
(Source: Karoly Lorentey/flickr)
(Source: Karoly Lorentey/flickr)

Reprieved by a raft of government incentives, Tata Steel is likely to delay the sale of most of its U.K. businesses, including a plant in Port Talbot. Indian steel giant said the pause will allow it to consider the options and assess the impact of the U.K.'s vote to leave the European Union. The company, which showed an initial urgency to get rid of its loss making British assets, has been steadied by rising steel prices in recent weeks.

Britain’s government offered “hundreds of millions of pounds worth of loans” to the company in addition to proposing 25 percent stake in the business, writes the BBC. Additionally, the government is mulling a special legislation to slash down pension benefits for many of the 130,000 members of the old British Steel pension fund.

In March, Tata Steel announced its plan to sell its U.K. businesses, which were making a loss of about £1m a day, owing to a slump in the steel price, cheap Chinese imports and rising costs of energy.

Reacting to the report, Port Talbot’s M.P. Stephen Kinnock said the Indian conglomerate’s decision to delay the sale of its U.K. operations would leave 11,000 employees in “limbo,” notes The Guardian. Kinnock called on Sajid Javid, the business secretary, who is scheduled to meet Tata executives in Mumbai, to make a statement in parliament after he returns from India. 

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