Thousands of jobs on line as British Steel goes into liquidation
British Steel has gone into liquidation, threatening thousands of job losses amid revelations that it would have run out of cash by the end of the week.
The company operates an Ireland Service Centre from Lisburn, which employs around 36 people. It recently supplied hundreds of tonnes of steel to build the new Grand Central Hotel in Belfast.
Owned by Greybull Capital, British Steel will continue to trade while the Government's Official Receiver searches for a buyer to rescue plants, including the giant steelworks at Scunthorpe.
At a High Court hearing in London, Mr Justice Snowden said cash-flow forecasts produced by the company and its advisers "indicate that the company will run out of cash by the end of the week, with a shortage of £14.8m, increasing thereafter to nearly £95m by early August 2019".
Greybull had been seeking financial support from the Government, saying it faced a number of Brexit-related issues, but talks failed to reach an agreement.
A winding-up order was sought "in relation to the company on the grounds that it is unable to pay its debts".
The judge said that on the basis of the evidence which he had seen, he was "entirely satisfied that the company is, or will in the immediate future be, unable to pay its debts as they fall due".
He said: "The evidence is that the debts of the company as at March 31, 2019 total £880m, which includes £151m due to the asset-based lenders and £206m due to the company's parent companies."
Business Secretary Greg Clark said yesterday that the Government had worked "tirelessly" to explore all potential options, and was willing to consider making a loan, but there was no reasonable prospect that it would have been repaid.
He said: "This will be a deeply worrying time for the thousands of dedicated British Steel workers, those in the supply chain and local communities.
"In the days and weeks ahead, I will be working with the Official Receiver and a British Steel support group of management, trade unions, companies in the supply chain and local communities, to pursue remorselessly every possible step to secure the future of the valuable operations in sites at Scunthorpe, Skinningrove and on Teesside."
A statement by the Official Receiver said staff have been paid and will continue to be employed, adding: "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 co-operation.
"The company in liquidation is continuing to trade and supply its customers while I consider options for the business."