The proposed bailout talks between Tata Motor's Jaguar Land Rover (JLR) and Tata Steel with the UK government have reportedly broken off as both the companies didn't qualify for taxpayer support to mitigate the impact of coronavirus on businesses. The failure to secure a bailout deal with the government would force the companies to rely on private financing to overcome the economic downturn.
Talks between the UK's Treasury and the Tata Group companies ended after the government concluded the Indian firms were sufficiently financed and didn't qualify for taxpayer support, according to Bloomberg report. The report also added that the stringent conditions imposed on lending, including decarbonisation requirements pushing electric vehicles, made the deal infeasible for the companies owned by Indian conglomerate Tata Group.
However, both the companies remain in ongoing and constructive talks with the UK government on other areas of potential support like tax breaks, which could extend to state loans in the case of Tata Steel, Financial Times reported.
Meanwhile, Tata Steel has said that it continues constructive talks with the UK government on areas of potential support.
Tata Steel has proposed the UK government to invest over 900 million pounds or $1.2 billion in the company as part of the talks between the two sides. The proposal also involved the company writing off a similar amount owed by the UK business. The company and the UK government were engaged in talks to secure the future of Port Talbot steelworks. The company employs 8,000 people in the UK, half of whom are in Port Talbot.
The discussions also involve various options, including shutting down Tata Steel's blast furnace operations at Port Talbot to switch over to greener alternatives.
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