Tata Steel stock jumped over 4 per cent on Monday following a news report said that the company is in advanced talks to secure funds for its UK plant. The stock was trading at Rs 131 on the BSE, up 3.6 per cent from its previous close. The steel major is in advanced discussion with the UK government for around GBP 500 million in state-backed funding to support its Port Talbot plant, securing thousands of jobs in the country's steel industry. A deal is reportedly close to being reached, according to Sky News.
A Tata Steel spokesperson said, "Tata Steel is continuing to discuss with the UK government a framework for continuity and decarbonisation of steel making in the UK amidst very challenging underlying business conditions given that several of its heavy end assets are approaching end of life.”
The draft plans, nearing finalisation, involve the UK government pledging approximately GBP 500 million in funding, and the Tata Group agreeing to invest GBP 700 million in capital expenditure. These funds will support the transition from polluting coal-fired blast furnaces to greener and more efficient electric arc furnaces for steel production.
According to UK media reports, the draft plans close to being finalised include the UK government committing around GBP 500 million of funding and the Tata Group agreeing GBP 700 million of capital expenditure to help pay for a switch away from polluting coal-fired blast furnaces. The Indian steel major would reportedly commit to building electric arc furnaces, which offer greener, less labour-intensive ways of producing steel than traditional blast furnaces.
The unions, meanwhile, have expressed concerns over reports that a few thousand job losses are expected as part of the negotiations at the Tata-owned Port Talbot steelworks, which employs around 4,000 workers.
At 12.40 pm, the BSE Sensex was trading higher by 170 points at 65,556. On the other hand, the NSE Nifty50 was trading at 19,501, up 66 points.