British Steel gets cash to avoid risk of collapse

British steel last night staved off the threat of collapse for the time being after securing new funding from its owners and lenders.

Britain’s second steel biggest producer, which is owned by private equity firm Greybull Capital, said in a statement that it had ‘the required liquidity’ and that its operations would ‘continue as normal’.

Greybull, which secured a £120million loan from the taxpayer in April, had asked for an additional £70million to plug a funding crisis, but the Government had refused a bailout.

Around 4,500 jobs were at risk at British steel, which owns the scunthorpe steelworks. the firm said that uncertainty over Brexit has hit sales to Europe. Earlier,

‘Government refused bailout’

it emerged that Greybull has charged British steel £60million while asking for the taxpayerfunded bailout.

Greybull, which bought British steel for £1 in 2016, has loaded £154million of debt on to the firm, charging interest of close to 10 per cent. Accounts show British steel owes £16.9million in interest for each of the past three years, plus £9million in other fees, coming to £59.7million in total.

Greybull said management fees were charged at below market rates, and the high interest rate was because of British steel’s low credit rating.

But MPs told of their anger that thousands of steelworkers face uncertainty as ‘vulture private equity owners’ profited from the business.

Last night British steel said in a statement: ‘We are pleased to confirm that we have the required liquidity while we work towards a permanent solution.’