Rescue package for British Steel
BRITISH Steel is poised to receive hundreds of millions of pounds from the Government to secure its immediate future.
The Department for Business, Energy and Industrial Strategy [BEIS] has agreed a package to smooth the path to a takeover, saving thousands of jobs. Turkey’s military pension fund has emerged as the favourite to take over the UK’s secondbiggest steel producer, which was wound up in May. Government assistance would allow the Official Receiver, which is running the business, to grant Ataer Holding a formal period in which to complete a takeover. It is understood state support could be worth more than £300million. Ataer, a subsidiary of Oyak, Turkey’s military pension fund, is believed to have put in a formal and final offer for British Steel of £60-£70million.
Oyak is itself the largest shareholder in Turkish steelmaker Erdemir, which has denied it was involved with the process.
In 2016, Greybull capital paid a nominal £1 to rescue the company from Indian giant Tata Steel and renamed it British Steel.
A slump in orders from European customers owing to Brexit uncertainty has been blamed for the crisis. British Steel has also struggled with a weak pound and cheap Chinese steel.
The steelmaker was wound up after the Government refused to bail it out. It was placed in compulsory liquidation putting 5,000 UK steel jobs at risk plus 20,000 in the supply chain.
The Official Receiver said in a statement: “The company in liquidation is continuing to trade and supply its customers while I consider options for the business. Staff have been paid and will continue to be employed.”
If the firm goes under, more than 4,000 jobs will be lost from its Scunthorpe steelworks, with the rest at plants in Teesside and Skinningrove, North Yorks.
A BEIS spokesman said: “This government will leave no stone unturned to get a good solution for British Steel.”