British Steel collapses putting 25,000 jobs at risk
The UK’s second largest steel producer collapsed into insolvency after it failed to secure emergency funding from the government putting thousands of jobs at risk.
British Steel went into administration on Wednesday, putting 5,000 direct jobs at risk and endangered another 20,000 in the supply chain.
The steel producer collapsed after it failed to secure emergency funding after rescue talks held between the UK government and the company’s owner Greybull Capital broke down.
Hunt for British Steel buyer begins
The Government’s Official Receiver, which will handle the liquidation process of British Steel, has taken control of the company and the hunt for a suitable buyer to acquire the steel producer has begun.
Despite the government being open to new buyers, the opposition Labour Party has called for British Steel to be brought under public ownership and renationalised.
For the time being, the company will continue to trade as normal and staff will remain employed by British Steel, with the majority based in Scunthorpe.
Greybull Capital fail to save British Steel
British Steel’s owner Greybull Capital specialises in turning around distressed businesses, but was forced to admit defeat on this occasion, blaming its failure on the challenges created by Brexit.
The investment company famously acquired British Steel from its previous owner Tata Steel for just £1 three years ago.
Greybull Capital was able to generate a profit at the ailing steel producer in 2017 but was forced to cut 400 jobs last year in a bid to save the company as it struggled to deal with a weakening pound and increased Brexit uncertainty that hurt demand.
‘In light of events over the past few weeks, it is clear Greybull needs to do the right thing by getting out of the road and let those who are committed to our industry work to save the business,’ the union Community said in a statement.
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