Network Rail makes bid for British Steel

Network Rail has made a bid for sections of Scunthorpe-based British Steel ahead of an initial deadline for offers for the company, according to reports.

British steel which ordered into compulsory liquidation last month, putting around 5,000 jobs at risk.

A Network Rail spokesperson said: “We continue to support British Steel, working with the liquidator and any new owner of the company. We have made an indicative offer for some railway critical assets although our overwhelming preference is that a purchaser for the entire business is found.

“We are very clear that our offer will not undermine that. Our role is to safely run the railway for the millions of people who rely on it every day and we are exploring all options to make sure we can continue to do that.”

Network Rail said over the weekend it made the bid to avoid the possibility of losing one of its most important suppliers, according to The Guardian.

The Government’s official receiver is the compulsory liquidator while the court appointed members of EY’s restructuring team as special managers.

British steel – which also has a Ro 80therham site- is the country’s second-largest steel producer, and is owned by private equity firm Greybull Capital which acquired it in 2016 from Tata Steel for £1.

Following the acquisition, it looked like the turnaround was proving successful, with the manufacturer reporting EBITDA of £68m in 2018, compared to £47m in 2017.

However earlier this year it was forced to borrow £120m from the Department of Business, Energy and Industrial Strategy to pay its EU carbon emissions bill, and reportedly asked for a further £75m to enable it to continue trading over the next few months. It was then forced

Greybull Capital, the private equity investor under which British Steel collapsed, confirmed on Sunday that it was also interested in a bid for parts of the company if a buyer for the entire operation could not be found.

Potential bidders had until the end of yesterday to make offers.

About a dozen companies were thought to have expressed interest in buying all or parts of the firm after around 80 made initial enquiries, according to The Guardian.

Potential buyers reportedly include India’s JSW and Evraz, a Russian steel and metals conglomerate part-owned by Roman Abramovich.

 

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