Tata Steel is considering cancellation of the sale of its UK assets due to the pressure from the referendum-bound UK government. According to The Economic Times, the process of sale has slowed down as the British government is trying to convince the company to retain the business.
The UK government believes Tata’s exit will reflect badly on the country’s economic competitiveness. The Port Talbot plant is losing £1 million (Rs 9.7 crore) a day.
Britain is currently struggling to reach a decision regarding its membership in the European Union (EU). The Brexit campaign, which refers to Britain’s exit from the EU, will conclude with the referendum on 23 June. Its counter-movement is the Remain campaign which demands that the country stays part of the EU.
According to the The Economic Times report, progress in Tata’s plans is expected to be slow until the end of the campaign. Even though Tata made an official statement that it will soon be short-listing the names of bidders for the sale of its plant, details are yet to be confirmed.
The development made potential bidders cautious:
It is very frustrating. Earlier they were in a mad rush, now they are dragging their feet. This kind of indecisiveness certainly makes Tatas look really bad in the market.
We don’t know what to make out of all this. Unions are also not cooperating completely. There is massive confusion.
Reportedly, the British government has offered the company a multi-million-pound loan to convince it to stay in the country. Tata Steel is expected to enter into a dialogue with the government regarding a loan on “commercial terms”.
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