British Steel has been saved from possible collapse, despite the government saying no to providing bailout funds.
Company owners and lenders have agreed on a deal to provide more funds. This has saved the jobs of 4,500 workers employed by the company at its Scunthorpe steelworks, one of only two steelworks remaining in Britain.
British Steel blames its financial troubles on the failure of the government to achieve a Brexit deal. Orders from EU customers have significantly decreased as a result of the lack of clarity. The injection of finance is a temporary solution, and British Steel still wants the Brexit situation to be settled so that it can trade freely with European companies.
A British Steel statement said:
“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.”
The chairman of British Steel, Gerald Reichmann said that the increase in the price of raw materials had also impacted the profitability of the business.
British Steel, despite its cash issues, is committed to purchasing a new French facility in Ascoval, which will have no restrictions on selling to the EU.
British manufacturers that make equipment such as heavy duty trolleys from tubular steel are not reliant on purchasing steel manufactured in Britain, but is in their interest to have many steel plants open as this will keep the prices they pay for steel competitive.Get a free quote