British Steel has been transferred to the Official Receiver and is in compulsory liquidation following a breakdown in rescue talks between the UK government and the company’s owner, Greybull. This has put 5,000 jobs at risk and endangering 20,000 further jobs in the associated supply chain. This course of action has been necessitated due to neither the government or Greybull being prepared to offer further support hence British Steel couldn’t afford to appoint receivers its self.
This sad state of affairs has arisen despite the business being profitable in 2017 & 2018 and it seems strange that it could collapse with such speed. Various factors have been put forward including Brexit and the impact of lower sterling, and the trade war between the US & China. However, given the UK remain, net importers, of long steel products it should be possible to supply the local market if tariffs etc are an issue.
Image Credit: OVKNHR/Shutterstock
As for Greybull, they have a track record of companies suddenly going into administration at the Uk taxpayers expense, it bought a majority stake in Monarch Airlines in 2014, but the airline failed in October 2017, triggering what was described as the UK’s biggest ever peacetime repatriation of stranded holidaymakers. Nearly 1,900 staff lost their jobs and it cost the UK taxpayer an estimated at £40.5m. They subsequently took over Monarch’s airline engineering arm in October 2018, but that went bust in January and hundreds more jobs were then lost. Sounds like bad luck, however, that’s not all folks-
In September 2015, Greybull bought the My Local convenience chain of 120 stores from supermarket chain Morrisons but it only lasted a few months falling into administration in June and Greybull has also been involved with electrical retailer Comet and Riley’s snooker halls, both of which also went bust. Business is risky however as the BBC have reported
Greybull seems to have an uncanny knack of making money out of these failed investments with former City minister Lord Myners stating:
“Greybull has a record of owning businesses which fail, but where apparently Greybull does not lose serious money, in fact, from a number of its failed investments, it’s made money”.
Something doesn’t quite seem right here.
