Saturday, 20 September 2014
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Conservative donor 'tried to invest in Forgemasters'

The Conservative Party donor who lobbied against a government loan to Sheffield Forgemasters also tried to invest in the company, it emerged today.

The government has come under increasing pressure in the last few days to publish full details of its decision to cancel the engineering company’s £80m loan, which would have funded a press for building nuclear power station components.

An email obtained by a Labour MP sent from donor Andrew Cook, chairman of engineering company William Cook Holdings, to business minister Mark Prisk revealed that Cook told the government the loan was ‘probably unnecessary and possibly illegal under EU rules’.

While Cook’s original email stressed that Forgemasters was not a competitor to his company, he released a statement today admitting that he had wanted to help provide the necessary money.

’It is no surprise that I am strongly opposed to the previous government’s handout to Forgemasters, particularly when I had already offered as a local businessman to help supply the funding they needed,’ he said.

Sheffield Forgemasters announced earlier this week that it is to suspend work on the press project because no suitable alternative funding is available.

A company statement said: ‘Without support along the lines of the withdrawn conditional loan offer, there is no easily available private-sector alternative funding structure that is both economically viable for the company and fair to existing shareholders.’

Graham Honeyman, Forgemasters’ chief executive, said that the company would continue to pursue the development of other opportunities based around its two smaller presses.

‘We are still keen to undertake the 15,000-tonne press development but feel that the company’s best interests will be served by suspending work on the project for the time being,’ he said.

The government has denied that its decision to scrap the loan was influenced by Cook’s email. ‘Ultimately, we came to the reluctant decision that the loan was simply unaffordable at this point,’ Prisk told the House of Commons on Wednesday.

However, prime minister David Cameron and deputy prime minister Nick Clegg have come under fire for previously saying the loan was cancelled because Forgemasters’ owners were unwilling to dilute their shareholding.

The Financial Times this week reported that Honeyman told Clegg he was willing to dilute his share and that Clegg admitted this in a letter to the chief executive.

Ed Miliband and Jack Straw called on Clegg to correct his statement in parliament. At Prime Minister’s Questions on Wednesday, Clegg said that ‘the problem was simply one of affordability’ and accused the previous government of writing cheques it knew would bounce.

Click here to read how Forgemasters’ giant forge press could have propelled the UK to the summit of the global nuclear supply chain.


Readers' comments (3)

  • If this is such a sure thing, where's the rush of investors. Even in today's conditions for the people with the resources £80m isn't much.

    Either this project isn't as financially brilliant as we'd like to think or there's a degree of bias in the reporting of this on-going saga.

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  • It is simply a case of other investors and Governments have heavily invested in their own nuclear component manufacturing capabilities. This means components could be purchased from a market already awash with competition, and much more cheaply.

    For this proposal to be successful it needs a market with much less competition to guarantee a return on the loan.

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  • That's an old myth, that you can purchase components like these abroad much more cheaply. Plus, I would rather have british made components for critical engineering like this.

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