Nuclear submarine steelmaker set for public ownership
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A key supplier to the UK’s nuclear submarine building programme is set to be taken into public ownership amid concerns over its financial situation.
Sky News reported that the Ministry of Defence (MoD) is finalising a move to nationalise Sheffield Forgemasters, one of the country’s oldest steelmakers.
Talks over such a step have been going on for six months, but an announcement on a deal could happen in the coming days, Sky said.
An MoD spokesman said: “Sheffield Forgemasters is a strategic supplier to Defence; therefore we are in regular dialogue with them. It would be inappropriate to comment further.”
David Bond, the firm’s chief exec, said: “Our long-term relationship with UK Defence prime contractors and the MoD is based on the critical work we do within the Submarine programme and it would be inappropriate to comment further on such commercial sensitivities.”
Sheffield Forgemasters dates back to the 1750s, but has been hamstrung by increased financial difficulties in recent years.
In 2016, three of the UK’s industrial blue-chips, key MoD partners BAE Systems, Babcock International, and Rolls-Royce, underwrote a £30m loan for the firm from Wells Fargo.
Its role in the submarine programme is shrouded in secrecy, but is believed to involve the design and manufacture of advanced steel components.
Taking the firm into public ownership would mark yet another foray into nationalisation for the government, which has proved to be much more amenable to state intervention than most had anticipated.
Last year the MoD took charge of the Atomic Weapons Establishment (AWE), which is responsible for the design, manufacture and support of warheads and was previously run by a private sector consortium of Serco, Lockheed Martin, and Jacobs.
In addition, the new National Security and Investment Act allows ministers to protect assets deemed crucial to national security from takeover by foreign firms.
Back in 2015, Sheffield Forgemasters was itself approached by a state-owned Chinese firm about a rescue deal, which was blocked by ministers.