Government Backing & Support2 Mar 2019 23:34
Myosotis & wwguk:
I agree with your statements regarding the status of the IPA. In fact, I do wonder why the British Government does not view the likes of SXX as a worthwhile Investment opportunity in its own right. The bailout of Northern Rock is showing a good return for the government but I believe the government should 'invest' treasury funds in UK companies as a 'portfolio' rather than seeing it as a grant, subsidy or investment guarantee mechanism.
The US uses OPIC for its 'investment strategy' which is just another way of subsidising US companies; however they are now moving into more foreign investments, particularly in likes of Affrica (precious metals etc).
So, I believe the UK government will support SXX but I 'm not 'exactly' clear on what the IPA process means and others may be able to clarify.
For example is it seen as a guarantee to cover any funding not fully realised, so the government only puts up as much as is necessary to close the funding round? Or is it a 'Fund Matching' mechanism where the government proposes to match like-for-like' and so will cover half the total funding required?
Does it mean the government will remain invested in SXX (just like any private investor), or does the government have to ultimately extract its support (e.g. sell shares) so that once the company enters production the government is not seen to be 'subsidising' SXX and thus potentially incur potential Trade-related embargoes, tariffs etc.
As I say, I think the Treasury should see this as more of a 'Investment' opportunity. Let's face it, if SXX succeeds it represents a very nice Tax benefit to the government, not to mention the job creation (hence potential jobless reduction).
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