According to people familiar with the situation, Tata Sons is considering exiting its UK business because the British government, led by Liz Truss, is unlikely to provide a £1.5 billion subsidy package for the proposed transition to green energy. Tata Sons has stated that the funding is required to replace the plant’s carbon-intensive blast furnaces with electric arc furnaces over the next few years. According to one of the people cited above, Tata Sons does not see much point in waiting for help from the UK government, which is “sitting on the fence,” and various exit options are being considered.
The Tata Group, which has had a significant business presence in the UK for many years, has been vocal about the need for government support in order to remain viable.
“Exiting businesses that also support local communities has never been our group philosophy, but it must be recognised and supported by the government as well,” said an executive close to the development.
According to the spokesperson, Tata Steel is seeking assistance from the UK government in two ways. First, through policy, by encouraging the transition to green steel and ensuring a cost-competitive landscape, and second, through partnership in project financing, given the size of the investment and Tata Steel’s UK business’s financial constraints.
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