British Steel rescue hopes fuelled as deadline set for potential buyers

Liquidator says contact has been made with more than 80 prospective purchasers

Hopes of a rescue deal for British Steel have been fuelled after its liquidator said contact had been made with more than 80 potential purchasers, who have been given until early June to register their interest.

The official receiver said that “good progress” was being made in the hunt for a new owner for the UK’S second-largest steelmaker, which entered into compulsory liquidation last week after its request for a state bailout was rejected.

“Multiple parties have signed non-disclosure agreements giving them access to a detailed information memorandum and virtual data-room that my team

has developed to inform their bids,” added the court-appointed civil servant in charge of the insolvency process.

British Steel employs around 5,000 people, mostly at the giant Scunthorpe plant in north Lincolnshire.

Industry figures believe possible bidders could include Liberty House, the private equity fund Endless and Indian steelmaker JSW. The accountancy firm EY, which is assisting, has sent NDAS to 60 of the prospective buyers.

British Steel has blamed its problems on Britain’s delayed departure from the EU, which has caused a slump in orders from customers on the continent.

It was granted a short-term £120m loan by the government this month to help meet payments under an EU environmental scheme, after Brussels suspended the allocation of carbon credits until a Brexit withdrawal agreement is finalised. But talks between ministers and its private equity owner, Greybull Capital, over an additional £30m broke down.

The government has however provided an indemnity to underwrite the liquidation process, which has enabled British Steel to continue trading.

“The company retains good support from its customers,” added the official receiver. “I would like to thank the workforce for their ongoing support. All staff have been retained and continue to be paid”.