The government has agreed an emergency loan to the UK arm of Spanish-based Celsa Steel in a bid to bolster its balance sheet amid the coronavirus crisis and rescue more than 1,000 jobs.
The size of the loan has not yet been disclosed, however, reports last month suggested the Cardiff-based steelmaker was seeking £30m from the government.
As part of the loan, which is expected to be repaid in full, the company must meet a series of legally-binding conditions set out by the government, including protecting jobs, slashing bonuses and promising to commit to net zero targets.
Restraints on executive pay were also written into the agreement, which also involved additional funding from shareholders and existing lenders.
In a statement, the Department for Business, Energy & Industrial Strategy (Beis) said: “The government has brought together the firm’s management, shareholders, and other lenders to create a strong package of support for the company, its workers and UK economy. This is a good deal for all parties.”
Beis said it maintained its commitment that bespoke support will only be provided during the coronavirus crisis in “exceptional circumstances”, where a company is “of strategic importance and all other options have been exhausted”.
Celsa Steel UK employs about 500 people directly in the UK, with hundreds of sub-contractors and employees throughout its supply chain.
The Spanish firm’s British operation produces around 1.2m tonnes of steel annually from recycled scrap metal, making it the largest producer of steel reinforcement in Britain.
The support package comes after members in the industrial sector urged the government to provide financial support to the struggling industry.
In April, Port Talbot-based Tata Steel called for a £500m loan from authorities, while discussions have also taken place with Liberty Steel and Jingye-owned British Steel.
Celsa Steel was approached for comment.