British Steel insolvency endangers 5,000 jobs
British Steel has been placed in compulsory liquidation, putting 5,000 jobs at risk and endangering 20,000 in the supply chain.
The move follows a breakdown in rescue talks between the government and the company’s owner, Greybull.
The Government’s Official Receiver has taken control of the company as part of the liquidation process.
The search for a buyer for British Steel has already begun. In the meantime, it will trade normally.
The Official Receiver said British Steel Ltd had been wound up in the High Court and the immediate priority was to continue safe operation of the site.
The company was transferred to the Official Receiver because British Steel, its shareholders and the government were not able to, or would not, support the business. That meant the company did not have to funds to pay for an administration.
The other companies within the British Steel group are continuing to trade as normal and are not in insolvency.
The Official Receiver and EY are looking for a buyer for the business. If they fail to find one, the firm would be wound up and redundancies would follow.
“I appreciate that this is a difficult time for the company’s employees, and I want to thank them for their ongoing co-operation,” Receiver David Chapman said.
“The company in liquidation is continuing to trade and supply its customers while I consider options for the business.
British Steel has about 5,000 employees. There are 3,000 at Scunthorpe, with another 800 on Teesside and in north-eastern England.
The rest are in France, the Netherlands and various sales offices round the world. Their wages this week have been paid by Greybull and the government will pick up the bill from now on.
Roy Rickhuss, general secretary of the steelworkers’ trade union, Community, said: “This news will heap more worries on workers and everyone connected with British Steel, but it will also end the uncertainty under Greybull’s ownership and must be seized as an opportunity to look for an alternative future.