Hopes of saving British Steel rise as potential buyers emerge
Government officials are hoping a saviour can be found for British Steel after speaking to 80 potential bidders. They said “multiple parties” had expressed an interest in taking on all or part of the business.
The Insolvency Service has been seeking buyers since British Steel collapsed last week, a financial failure that threatens 5,000 jobs, most of them at the Scunthorpe steelworks.
The official receiver, a government official overseeing the process, said 60 of the companies it had spoken to had been sent non-disclosure agreements, giving them access to the firm’s financial data.
Several are understood to have signed the documents, indicating that they are ready to take their approaches further, with more expected to follow suit this week.
Liberty Steel has been linked with a deal but has declined to comment on whether it has approached the Insolvency Service. The Financial Times has previously named the Chinese steel firm Hesteel, and the UK private equity group Endless as potential bidders.
The official receiver said: “Good progress is being made in identifying potential buyers for British Steel. 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. Expressions of interest are due with me by early June.
“The indemnity provided to me [by the government] has enabled British Steel to continue to trade and the company retains good support from its customers. I would like to thank the workforce for their ongoing support. All staff have been retained and continue to be paid.”
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Nic Dakin, the Labour MP whose constituency includes the Scunthorpe steelworks, said: “The steps taken over the last week have been positive but these remain worrying times for our steel industry. Reports that there are indeed buyers for British Steel are positive. Everybody involved will need to continue to work hard to achieve a good outcome.”
British Steel went into liquidation last week after the government said it would be “unlawful” to meet the company’s request for a £30m loan.
Labour has called for the business to be nationalised to prevent the loss of jobs and the closure of the Scunthorpe steelworks, one of the last two in the UK that makes steel from scratch using a blast furnace.
Government efforts have instead focused on finding a buyer, with efforts to secure a sale directed by the official receiver David Chapman, a government employee who oversees company insolvencies.
Greybull Capital, the private equity group that bought British Steel for £1 in 2016 from the Indian conglomerate Tata, is expected to face questions from MPs on the business select committee about its stewardship of the business.