British Steel steps back from brink as rescue loan talks continue

British Steel stepped back from the brink of collapse after four days of fears for its future.

The firm, which employs 4,500 workers, had been locked in crisis talks with the Government and union officials as it pleaded for a £75illion emergency loan from Whitehall.

The company was staying tight-lipped as to whether a deal had been reached – but insisted immediate worries had eased.

A British Steel spokeswoman said: “British Steel has the backing of its key stakeholders, including shareholders and lenders, and operations continue as normal.

“As the business navigates the significant uncertainties caused by Brexit, and explores options to strengthen the business for the long term, we are pleased to confirm that we have the required liquidity while we work towards a permanent solution.

“We are grateful for the support that our stakeholders and the British Government have provided to date.”

Industry insiders told the Mirror talks between the company and Government over a multi-million-pound emergency loan were expected to continue.

British Steel was formed in 2016 when private equity firm Greybull Capital bought Tata Steel’s Long Products Europe business, which makes steel for the rail and construction sectors.

Thursday evening's announcement was welcomed by unions which pressed for a solution to ease staff fears.

Community steelworkers union operations director Alasdair McDiarmid said: “It’s welcome news that Greybull has found sufficient funds to give the business a chance.

“However Greybull and the government must continue to focus on finding a solution that secures jobs and the long-term future of British Steel.

“At this critical time we would urge everyone involved, including suppliers and contractors, to hold their nerve and refrain from taking any kneejerk actions that could create further barriers to a successful outcome.”

Earlier, Tory ministers and Greybull had come under mounting pressure to thrash out a deal and save the firm from collapse.

It emerged the firm was on the brink of administration this week, as it begged the Government for a £75million loan to dig it out of a financial crisis.

It came just a fortnight after it was handed a £120million taxpayer-backed loan to meet an EU payment deadline for a carbon emissions bill.

The firm has blamed Brexit uncertainty for fuelling its troubles, though industry insiders say the problems run deeper.

British Steel employs 4,000 staff at its Scunthorpe plant, with local Labour MP Nic Dakin spearheading the battle to save jobs.

He said: “It’s right and proper that the Government does everything it can to secure this business’s future.”

Business Secretary Greg Clark faced demands to update the Commons on the crisis.

Commons Leader Andrea Leadsom told MPs: “It’s a very concerning time for all of those who are feeling nervous about the future of British Steel.

“The Government is doing everything it can to try and ensure that there is a good future for all of those concerned.”

Mr Dakin said the firm’s troubles had “taken everyone by surprise”, adding: “The sense was that things were progressing in a sensible direction, and this will have alarmed everybody.

“If you’re going to work, you want to have the confidence of being able to go to work tomorrow as well as today.

“I want the Government to find a way to provide the short-term loan to the company that it needs to get over this problem, not of its own making.

“They need to keep working hard with Greybull and other stakeholders to find a solution as quickly as possible.”

Praising the Mirror’s Save Our Steel campaign, which was launched amid thousands of job losses and plant closures at the height of the 2015 steel crisis, the MP added: “Keeping the pressure up is exactly what we need – pressure needs to kept up on everybody – on the Government but also on Greybull.

“If each party is saying they want to resolve this, they need to find a way to work together to resolve it.

“In the end, £75million – which is absolutely going to be paid back to the taxpayer with interest – is not a cost to the taxpayer, whereas losing all these jobs would be an immediate cost to the taxpayer in jobseeker’s allowance and lost tax income to the Treasury.

“It’s not rocket science to see that a small, short-term loan is good value for money for everybody.”

Community had warned the saga could trigger another “tragedy” like the closure of the SSI UK Teesside Steelworks plant in Redcar in 2015.

“We are urging all sides to remain focused on achieving a positive outcome that retains steel production and protects jobs across all British Steel sites. Greybull needs to honour its social and moral obligations to thousands of workers and the Government needs to demonstrate through practical action that it is committed to the future of the UK steel industry,” a spokesman said.

“Everyone needs to do everything possible to give the company the chance of a future.

“There are no easy solutions to the challenges faced by British Steel and indeed other UK steel companies.”

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