LONDON (Reuters) - Troubled British Steel said on Thursday it had secured the backing of lenders and shareholders to continue operating as normal after the prolonged uncertainty around Britain’s departure from the European Union hammered its order book.
Britain’s second largest steelmaker has been in talks with the government, its lenders and shareholders to firm up its finances after customers recoiled from the possible threat of tariffs, damaging long term orders.
The company, which plays a key role in British manufacturing, said on Thursday that it had the backing of key stakeholders including shareholders and lenders, and operations would continue as normal. It thanked the government for its support.
“As the business navigates the significant uncertainties caused by Brexit, and explores options to strengthen the business for the long term, we are pleased to confirm that we have the required liquidity while we work towards a permanent solution,” it said in a statement.
The steelmaker, owned by investment firm Greybull Capital, employs around 5,000 people, mostly in Scunthorpe, in the north of England, while thousands more operate in its supply chain.
Greybull, which specialises in turning around distressed businesses, paid former owners Tata Steel a nominal one pound in 2016 for the loss-making company which they renamed British Steel.
After making a profit in 2017, its first full year of trading since the takeover, it cut around 400 jobs last year, blaming factors such as the weak pound.
A person familiar with the situation said it had asked the government for a loan of around 75 million pounds.
It secured a government loan of around 120 million pounds in May to enable it to comply with the European Union’s Emissions Trading System (ETS) rules.
Reporting by Kate Holton; Editing by Kirsten Donovan and Alexandra Hudson