May 22, 2019 10.39 am This story is over 61 months old

British Steel to enter insolvency process

Thousands of jobs are at risk
British Steel entered compulsory liquidation after rescue talks between Greybull Capital and the government broke down.

British Steel will enter an insolvency process putting thousands of jobs in the UK on the line.

This will put 5,000 UK jobs directly at risk, including those at the company’s flagship Scunthorpe site, and a further 20,000 in the supply chain.

As previously reported, British Steel was seeking a £75 million government loan to keep afloat, blaming what it calls “Brexit related issues”.

The firm, which employs 4,500 people at its Scunthorpe site and several sister sites was reportedly in talks over a rescue package.

The move follows a breakdown in rescue talks between the government and the company’s owner, Greybull.

The Government’s Official Receiver will take control of the company as part of the insolvency process.

Accountancy firm EY will take on the role of Special Manager and attempt to find a buyer for the business.

GMB the steelworkers’ union said ministers have abandoned workers and UK industry.

GMB General Secretary Tim Roache said: “This is devastating news for the thousands of workers in Scunthorpe and across the UK.

“Consecutive UK governments have failed to protect our proud steel heritage, and now this Prime Minister is overseeing its demise.

“Ministers should have been ready to make use of all the options – including nationalisation – in order to save British Steel but they either don’t care or wouldn’t take off their ideological blinkers to save hard working people and communities.

“GMB demands urgent reassurances on what the future holds for the thousands of British steel workers and their families.”

British Steel secured a £120 million loan from the government just a few weeks ago to pay its EU carbon bill, meaning the company narrowly avoided a steep fine over its carbon dioxide emissions.

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