Tuesday, August 4, 2020

Supply chain at risk as Scunthorpe’s British Steel collapses into insolvency

The High Court has ordered Scunthorpe-headquartered British Steel Limited into compulsory liquidation, putting 5,000 jobs on the line. The Official Receiver has been appointed as liquidator.

A statement from the Official Receiver says: “The immediate priority following my appointment as liquidator of British Steel is to continue safe operation of the site. I appreciate that this a difficult time for the company’s employees and I want to thank them for their ongoing cooperation.

“The company in liquidation is continuing to trade and supply its customers while I consider options for the business. Staff have been paid and will continue to be employed. The court also appointed Special Managers to assist me with my work and they are engaging with staff and their representatives to keep them informed, as well as contacting British Steel’s customers.”

The Court has appointed Hunter Kelly, Sam Woodward and Alan Hudson of EY to act as Special Managers to assist the Official Receiver with his duties as liquidator.

The news follows the failure of rescue talks with owner Greybull.

In response to the news, Mike Cherry, National Chairman at the Federation of Small Businesses, said: “This is a hugely unsettling time for the British Steel workforce, who will be devastated by this announcement. The news is also extremely worrying for the large network of small businesses involved in the company’s supply chain, who will now be very concerned about the future.

“The closure will cause a huge knock on impact across the communities surrounding the company’s plants. A raft of small firms like caterers, cafes, cleaners, shops and visitor attractions, all of which employs their own staff, rely heavily on British Steel.

“Businesses throughout the supply chain will need guidance and support as the situation develops.”

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