The hunt for new owner of British Steel begins
British Steel, the UK's second-largest steelmaker, was forced into liquidation this week, just a day before the European Parliamentary elections began. Talks between the company's owner Greybull Capital and the government broke down leading to the Official Receiver taking control. The government has already drawn up a rescue plan whereby it would act as a cornerstone investor working with a consortium of private companies.
The potential collapse of British Steel has put 5,000 jobs directly at risk and 20,000 supply chain jobs are also in danger.
The company has been struggling with a drop in order numbers from customers in Europe largely due to the continuing uncertainty over Brexit. The escalating US-China trade war has also been cited as a factor as well as a weak pound since the 2016 EU referendum.
UK Business Secretary Greg Clark told the House of Commons that the government had a "willingness to help secure British Steel's future" whilst also expressing a frustration at Greybull's apparent reluctance to put "a sufficient cash injection in".
In his statement to The House, Mr Clark said: "The insolvency removes Greybull from day to day control of British Steel. Given the government’s willingness to help secure British Steel’s future, demonstrated in the ETS facility, and the discussions that have taken place in recent weeks, the government will work closely with the Official Receiver and prospective new owners to achieve the best outcome for these sites."
"We will take every possible step to ensure that these vital operations can continue, that jobs are secured, and that the sites at Scunthorpe, Skinningrove and on Teesside continue to be important centres of excellent steelworking,"
Mr Clark finished his statement by saying: "Today is a very big setback for these operations, but it is far from being the end and we will take every possible step to secure a successful future for these vital assets – both people and plant."
It has been speculated that one of the potential new owners could be Liberty Steel. The global giant already has a presence in Scunthorpe, where British Steel is based, having bought Caparo Merchant Bar in 2017. Caparo was, at the time, part owned by Greybull Capital, the company who failed to make British Steel work.
A Liberty Steel spokesperson said of the speculation: “We are monitoring the situation at British Steel carefully and share the concern of the whole UK steel industry about the future of the site and the jobs there.”
Liberty already has two steel rolling mills in the town and the new CEO Cornelius Louwrens once served as director of operations for Tata Steel's Long Products division.
British Steel is not the first of "turnaround" specialists Greybull Capital's failed assets. In the past five years, four other companies from its portfolio have gone into administration; Monarch Airlines, Comet, M-Local and Rileys.
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