UNIONS representing steel workers have said yesterday's announcement that the Government could take up to a 25 per cent stake in Tata Steel UK is a 'positive step forward.'

The option to take a 'minority equity stake' in the steel firm is part of a package of support worth hundreds of millions of pounds to be made available to potential buyers of Tata Steel UK, the UK and Welsh Governments confirmed yesterday.

This follows a second meeting between business secretary Sajid Javid and Tata Global chairman Cyrus Mistry this week in Mumbai where progress on the sales process was discussed.

The financial support package will be tailored to the purchaser’s strategy and financing needs. It is expected that all, or the large majority, will be through the provision of debt financing. 

The Government said the option for a stake of up to 25 per cent will not mean they will acquire a material element of control over the business.

The secretary of state for Wales Alun Cairns MP visited Tata Steel in Llanwern yesterday and spoke with workers and unions about the sale process. 

He said: "I would hope any investors take today's statement as confidence it is a priority of the UK Government to maintain the UK’s steel making industry. 

"Despite significant interest from investors there is no guarantee (the industry will be saved) but the Government’s statement published today gives a high chance with the level of support we are prepared to give – it shows what a priority the industry is to is; saving local jobs and the value it adds to the economy."

The announcement made in partnership with the Welsh Government, follows the start of a formal sales process announced by Tata Steel last week.

First Minister of Wales Carwyn Jones said they were 'committed to supporting any credible bid to secure steel making in Wales.' He said they believe this support package will help secure a successful sale of Tata Steel’s operations in Wales and the rest of the UK.

Leader of the Welsh Conservatives Andrew RT Davies, said the fact that the UK Government are prepared to take such a 'significant stake' in the business can only improve prospects for a sale but said the 'first minister must now be prepared to reveal how much of a stake his government is willing to take."

Gwent business tycoon Sir Terry Matthews has given his backing to a consortium which includes Port Talbot plant boss Stuart Wilkie who are looking to buy Tata Steel's UK operation. The investment Mr Wilkie is seeking from employees could be as much as £10,000 each, according to sources. Private investors and Government support would also be needed.

Sir Terry told the BBC he agreed with the Government's financial support and said he would potentially look at investing his own money. 
The consortium is in the process of going through details of a management buy-out.

Both Community, the steelworkers’ union, and Unite welcomed the announcement.

Roy Rickhuss, general secretary of Community, said: "This news is a credit to Community members and the positive, professional ‘Save Our Steel’ campaign they have run since Tata first announced they intend to sell the business."