BRITISH Steel could be saved by private companies joining forces with the Government, it emerged last night.
Business Secretary Greg Clark has drawn up a rescue plan in which public money would be invested.
Alamy The British government could join forces with private firms in a bid to save British Steel
It is being checked by lawyers to see if it would fit in with EU state aid rules which ban a direct loan, said the Financial Times.
The move comes as the UK’s second biggest steel maker collapsed into insolvency yesterday.
However, the investment firm which bought the firm for just £1 has raked in millions.
Greybull Capital took up to £9million in management fees and earned an estimated £50million in loan interest.
The self-styled turnaround specialist’s previous failures include Monarch airlines, which went bust in 2017, and convenience store group My Local, which went under in 2016.
Unless a buyer is found, British Steel’s 5,000 workers — most of them based in Scunthorpe, Lincs — and 20,000 jobs in its supply chain could go.
Mr Clark is likely to face questions over why he approved a £120million loan facility weeks ago to enable the firm to meet an EU environmental bill.
Sources said the money would likely be refunded.
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Greybull bought British Steel from India’s Tata Steel for the nominal fee in 2016.
It failed in the face of lower steel prices and mounting bills — as well as uncertainty over tariffs post Brexit.
Greybull said: “The turnaround was always going to be a challenge.”
The Sun says
PUBLIC money should not be spent shoring up British Steel.
Its collapse is devastating for thousands of workers — and the first move must be to try to secure a buyer to make the business viable. That’s a tall order.
The second is to probe why private firm Greybull, which bought it for £1, presides over so many corporate disasters.
But under EU rules the Government cannot pour state aid directly into a failing business. Nor should it.
It should spend millions instead retraining those workers and funding tax breaks to lure new firms to Scunthorpe.
Admittedly, that would require a coherent industrial strategy Britain lacks.
But the Tories must not abandon this community whose livelihoods are at risk.
PA:Press Association The jobs of British Steel’s workers are at risk – especially those based in Scunthorpe
Greg Clark reads a statement to the Commons as British Steel collapses ‘over c’ with 25,000 jobs at risk