The UK government has provided an emergency loan to Celsa Steel (UK) Ltd to allow the company to continue trading. The agreement safeguards over 1,000 jobs, including more than 800 positions at the company’s main sites in South Wales.
As part of the loan, which is expected to be repaid in full, the company must meet a series of legally-binding conditions. These include commitments to protect jobs, climate change and net zero targets, improved corporate governance, such as restraints on executive pay and bonuses, and tax obligations. Also required are further financial commitments from shareholders and existing lenders.
Although the government did not specify the value of the loan, it is widely reported to be £30 million ($37m).
General Secretary of steelworkers’ trade union Community Roy Rickhuss says: “We’ve said since the start of this crisis that we need our industry to survive the pandemic and then thrive in the future so it can be at the foundation of the recovery. This agreement with Celsa Steel is a vital part of ensuring that can happen and will help to provide some certainty and confidence at a challenging time. We hope this is just the start of steel companies securing the support from government that they need to get through this crisis.”
However, he adds: “The loans are necessary but alone are not enough. More will need to be done by government to step up and stimulate demand and to make sure that works for UK steel producers. Celsa can play an important role in supplying steel for major infrastructure projects but it needs the right environment in which to compete and the right procurement decisions which keep the most value and jobs in the UK.”
Reports last month suggested the UK government was reported to be close to agreeing large loans to local steelmakers Celsa and Tata Steel (see Kallanish passim).
