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British Steel on brink of collapse, reports suggest

British Steel could lapse into administration within days if an emergency government loan fails to materialise, according to reports.

Sky News reports that British Steel – the second largest steel producer in Britain – is preparing for insolvency on Wednesday, with suggestions that it is becoming increasingly unlikely that funding will come through to safeguard the roughly 25,000 jobs across the company.

Consultants EY are expected to be formally appointed as administrators within 48 hours, Sky reports, if a deadline of Tuesday afternoon for a deal is not struck.

While British Steel was reportedly asking the government for £75m in assistance, this has now been reduced to £30m.

Falling into administration would be another blow for the company’s workers, less than a week after a statement from British Steel suggested that it had sufficient funding to continue business as usual.

There are particular concerns over the firm’s Scunthorpe site, which is home to  some 4,000 employees.

Further plant closures, or cuts to pension entitlements to sure up British Steel’s finances, could run the risk of more workers looking towards defined benefit transfers, as was the case in the company’s Port Talbot works.

The inside story of the British Steel DB transfer scandal

Tata Steel, which owns the Port Talbot steelworks, was in talks with Germany’s Thyssenkrupp, but these were abandoned two weeks ago.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. “more workers looking towards defined benefit transfers”. Good luck with this, BSPS2 transfer values are 20% to 35% lower than original schemes, most advisers cannot get PI to cover them.

    Many Pension Specialists will not touch them and rightly so, the political games, the media circus and witch hunt means it is to dangerous an area to provide advice.

    Unintended consequences means most advisers will not be insured to offer advice, those that could are most likely now restricted to no more than 10 transfers from any one scheme.

  2. There are still unscrupulous advisers out there willing to make a killing while they can.

    And enough ‘good’ advisers who believe they are doing a good job but are totally incompetent and believe anyone with more than 20x income should move because Pru are returning more than 5%.

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