British Steel lenders insist on plant closure
British Steel lenders are urging the government to complete efforts to find a buyer for the bankrupt business as they seek to protect their financial position in the face of mounting losses.
Sky News has learned that White Oak ABL, the main lender that agreed to provide British Steel with a £ 90m loan in July 2018, is lobbying advisers working at the company's auction to close it quickly.
Sources said White Oak is insisting that British Steel's main plant in Scunthorpe, which employs more than 3,000 people, should be closed unless a deal is made to save its future.
The growing pressure on the government to find a buyer for the business reflects lenders' concerns that British Steel's losses, which are said to be around £ 5m a week, are undermining potential returns for lenders.
It also highlights OR's embarrassing position given its commitment to acting in the best interest of creditors, even if government ministers insist that the company will be funded until a buyer for the Scunthorpe plant is found. p>
EY, which is OR's special manager, continues to negotiate with two potential buyers of all British Steel.
Earlier it was reported that one of them is Erdemir, a Turkish steelmaker who is trying to distance itself from taking over the second largest steelmaker in the UK.
However, British media reported on Tuesday that the applicant is in fact a transmission link associated with Oyak, the Turkish military pension fund, which is itself Erdemir's largest shareholder.
The Oyak-related proposal is believed to include plans to preserve the Scunthorpe steel plant, but is seeking compensation for the plant's historic environmental obligations, according to people close to the process.
The other main contender is Liberty House, an industrial conglomerate, although several insiders said a Turkish bid was more likely at this point.
Other contenders for British Steel's shares included Greybull Capital, which owned the company for three years prior to its collapse, and Evraz, a Russian steel group.
As a result of the uncertainty surrounding the future of the company, EY has developed contingency plans for the eventual closure of its vast steel mill in Scunthorpe.
Since its collapse and liquidation 11 weeks ago, British Steel has been funded by a taxpayer-backed refund.
The loss of British Steel means that the prospect of a full takeover without any form of guaranteed government funding is distant.
His bankruptcy came a few weeks after Mr. Clarke handed over a £ 120 million government loan to the company to help it meet its obligations under the EU Industrial Pollutants Scheme.
Another support package was supposed to be provided by British Steel, but was withdrawn due to concerns that it would violate EU state aid rules.