British Steel seeks more gov't financial

Wednesday, May 15, 2019

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LONDON, United Kingdom (AFP) — British Steel said yesterday it was seeking more financial support from the UK Government, as it faces Brexit strains and sector-wide uncertainties.

In a statement, British Steel said that “discussions are continuing about a package of additional support to assist the company address broader Brexit-related issues, whilst continuing with its investment plans”.

The Government agreed two weeks ago to inject 100 million (US$129 million) in funding to help British Steel pay its latest carbon emissions bill to the European Union.

Britain's second-biggest steelmaker wants another loan of 75 million to avert its demise, Sky News reported citing unnamed insiders, adding that insolvency experts were on standby.

A collapse of British Steel would spark the loss of up to 5,000 jobs at the group's sprawling steelworks in Scunthorpe, northern England.

The news comes amid uncertainty over the future of Tata Steel's main European operations based in the UK, after German industrial conglomerate Thyssenkrupp last week scrapped merger plans with the Indian giant.

A deal was seen as positive for Tata's Port Talbot plant in Wales that employs more than 4,000 staff.

Following the merger collapse, Thyssenkrupp said it would slash 6,000 jobs worldwide in a structural shake-up.

The German group said “continuing concerns” from the European Commission had sunk its bid to join its steel business in Europe with that of Tata's.

British Steel is meanwhile the second-biggest operator of the metal in the UK after Tata, while unions on Tuesday said the latest developments required government action.

“Thousands of UK jobs are on the line, not to mention the entire future of our proud steel industry,” said Ross Murdoch, national officer of the GMB union.

“Now is the time to take action. Minsters must come out and guarantee the loan required to safeguard British Steel.”

A spokesman for the Community union added: “We would urge all parties to recognise the consequences of not taking the necessary steps to ensure British Steel can continue.

“Everyone needs to do absolutely everything to give the company the chance of a future, as to do otherwise would be devastating for thousands of workers and their families.”

British Steel is owned by investment firm Greybull Capital, which founded the long steel products maker in 2016 after snapping up assets from Tata Steel.

Long steel products comprise plates, rails for railways, sections used in construction, and wire rod. The latter can be used as steel rope for infrastructure like suspension bridges or filaments for car tyres to give rigidity.

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