British steel facing administration

[tinfoilhat 11]

1 minute ago, bendix said:

 

It's been forced into liquidation, not administration.  Administration would give it a chance of surviving; liquidation doesn't.

 

Its demise was unavoidable.   The type of contracts BS works with are negotiated well in advance and are usually in place for 2-3 years.  With customers having no idea what tariffs on steel might be post Brexit, orders have collapsed and customers have gone elsewhere.  The government is unwilling to lend it the type of bridging loan required because it too has no idea what outcome Brexit will look like, or when, so doesn't know how viable the company is in terms of repaying the loans.

 

This is all coming from Greyball and BS management themselves, whom my company has close working relationships with.

 

The average salary at British Steel is £36,000 per annum, so that is 2000 relatively well-paid jobs gone.   Heartbreaking of course.  I wonder how many of them were turkeys voting for xmas three years ago?

70% voted leave in north east Lincolnshire.  

[lobster 54]

Whilst no doubt Brexit and Cheap Chinese Steel have played their part in British Steel's demise . Everybody seems to be missing the obvious,  the rather " murky " secretive hedge fund Greybull that acquired British Steel . They have a track record of acquiring distressed companies ,restructuring them so when they do go  bust Greybull make money . Remember Monarch Airlines ,Greybull claimed it would lose up to £250 million when in fact they had struck a rather lucrative deal with Boeing insulating themselves against large losses

 

Greybull acquired what was to become British Steel from Tata for £1 though there are unconfirmed reports that Tata handed over a not insignificant dowry and Tata picking up some of the pension liabilities . (Shades of Philip Green & BHS  ) Greybull seem to have put very little of their own money in  , taken out in substantial  fees  and protected itself as a secured creditor whilst leaving the British Taxpayer to pick up the tab

[bendix 10]

Why are Greybull secretive and murky?  They are a private equity fund designed to acquire and invest in - usually struggling - companies.  Some get turned around and become successful.  Others fail.

 

That's business.

[lil-minx92 10]

19 hours ago, ez8004 said:

Failing businesses should not be propped up by taxpayers money. 

Unless they are a bank

[Janus 28]

From the BBC link-

" One of British Steel's biggest customers is Network Rail, 95% - about 100,000, tonnes - of whose rails are supplied by British Steel's Scunthorpe plant"

 

I wonder where the steel will come from for these now.

 

Edited May 22, 2019 by Janus

[lil-minx92 10]

32 minutes ago, bendix said:

Why are Greybull secretive and murky?  They are a private equity fund designed to acquire and invest in - usually struggling - companies.  Some get turned around and become successful.  Others fail.

 

That's business.

Morally murky perhaps if the primary reason for acquiring a struggling company is to milk it for all its worth, whilst arranging things so that if it finally dies you don't do too badly either. Not saying thats what happened here...they might end up losing millions in the venture. I very much doubt it tho!

 

https://www.thisismoney.co.uk/money/markets/article-5153241/Monarch-owner-making-millions-British-Steel.html

 

[geared 303]

24 minutes ago, Janus said:

From the BBC link-

" One of British Steel's biggest customers is Network Rail, 95% - about 100,000, tonnes - of whose rails are supplied by British Steel's Scunthorpe plant"

 

I wonder where the steel will come from for these now.

 

Steel plants in Wales?

[bendix 10]

37 minutes ago, geared said:

Steel plants in Wales?

Unlikely.  The six different steel makers in the UK produce different types of steel - they don't compete with each other.  Either one of the other suppliers will need to change their output types, or it will have to come from overseas.

[tinfoilhat 11]

1 hour ago, Janus said:

From the BBC link-

" One of British Steel's biggest customers is Network Rail, 95% - about 100,000, tonnes - of whose rails are supplied by British Steel's Scunthorpe plant"

 

I wonder where the steel will come from for these now.

 

China maybe? I was reliably informed that we're already building warships out of Chinese steel.

[ez8004 10]

1 hour ago, lil-minx92 said:

Unless they are a bank

The banks that were bailed out were viable businesses. British Steel is not. 

[newcomer01 10]

In the scheme of things,an influx of cash to avoid the loss of part of our steel industry is a very small price to pay.Especially in light of the cash lost by the government investing cash in Brexit leave/stay,or even worse Chris Grayling and Prison  Service,Ferries and Railways cash that has been lost due to his incompetence.

[geared 303]

Yea but how much can you give??  They've recently swallowed over £100m and are back asking for more just a few months later.

Edited May 22, 2019 by geared