Rescue deal in the works for £88m steel manufacturer

Scunthorpe steel manufacturer Caparo Merchant Bar is close to being saved with a rescue deal expected to be completed this week.

Liberty Industries is reportedly the bidder for the business, which employs 160 and specialises in steel angles, steel beams, steel channels and steel crane rails, according to the Telegraph.

CMB converts primary steel products sourced from third parties to finished goods, operating two hot rolling mills at its Scunthorpe base.

It has struggled with heavy debt following the administration of its parent company Caparo Industries, for which it was forced to write off loans of £22.7m. 16 of the Caparo businesses were placed in administration at the time. Administrators at PwC have been running the business as a standalone since the collapse of its parent in October 2015.

The group was a casualty of the steel crisis, suffering intense pressure from low cost imports from China and high energy costs, amongst other things. The industry seems to have plateaued for the minute, with major players coming in to stabilise struggling businesses, and Tata slowing down its retreat from the UK.

More recently however, it has been suggested that US protectionist policies against China will affect the British steel industry, and the sector is bracing itself for Donald Trumps’ Section 232, in which huge tariffs could be imposed on imports.

British Steel was amongst potential buyers for the company, but Sanjeev Gupta’s Liberty Industries Group, which helped save swathes of the Tata Steel business, is reportedly set to take over.

PwC have been contacted for comment.