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Report: Government could offer loan to help Tata Steel sell Port Talbot

The Britishgovernment could offer a state loan on commercial terms to help spark buyer interestfor Tata Steel Ltd.'sPort Talbot steelworks, Reuters wrote April 12 citing a government source.

Tata Steel isreportedly investigating the potentialsale of all of its U.K. plants as part of a restructuring of the troubledbusiness and Port Talbot in Wales is said to be the biggest lossmaking asset in Tata's U.K. portfolio.

According tothe source, the government loan as part of a deal with other investors is the "likeliestscenario" for the purchase of the asset and there is only a remote possibilitythat the government would take an equity share in the steel operations.

However, Britishbusiness minister Sajid Javid earlier said the government would consider co-investingon commercial terms to secure the sale of Port Talbot, contrary to Prime MinisterDavid Cameron's statement that nationalization is not the right answer.

Javid also saidthe government had appointed Ernst and Young as the financial adviser on any deal.

Tata Steel'sTata Steel UK Ltd. unithad just signed an agreement to sellits Long Products Europe business to Greybull Capital for a "nominal consideration."