Greybull-backed British Steel in liquidation

Insolvency proceedings began following the breakdown of discussions with government regarding a £30m emergency loan. It had already provided a £120m bridging facility to enable British Steel to meet its emissions trading compliance costs. The government has now created a rescue proposal in which it will be a cornerstone shareholder alongside private companies.

The company could attract offers from China-based competitor HeSteel Company and private equity firm Endless, according to Unquote sister publication Mergermarket.

The company will continue to supply its customers, and employees will stay in work while the official receiver considers options for the business.

The company reported £1.4bn in revenues and an EBITDA of £68m in 2018.

Previous funding
In 1999, steel companies British Steel and Koninklijke Hoogovens merged to form Corus. Tata bought the group in 2007 and later renamed it Tata Steel Europe.

In 2016, Greybull acquired the Long Products Europe business from Tata Steel for £1 and provided a financing package of more than £400m. Greybull provided half of the capital, and PNC and Citi provided the other half.

The business consisted of the Scunthorpe steelworks, two mills in Teesside, an engineering workshop in Workington, a design consultancy in York, and distribution facilities, as well as a rail mill in northern France.

In July 2018, US-based White Oak Asset Finance invested £90m in the company to provide working capital and capital for investment projects.

Company
British Steel operates sites in Scunthorpe, Skinningrove, Teesside, the Netherlands, France and sales offices around the world. It employs more than 5,000 people. The company produces and distributes steel long products for construction, railways and specialised uses. The company was formed in 2016.

People
British Steel – Gerald Reichmann (CEO).

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