The first day of trading for the new British Steel follows the successful completion of the sale of Tata Steel UK’s Long Products Europe (LPE) business to Greybull Capital LLP (Greybull), the British-based family investment office.
British Steel Commercial Director Peter Hogg described it as a landmark day for the business.
He said: “Today marks the first day of business for our new company and we are delighted to be launching under the iconic British Steel brand.
“It has taken a huge amount of effort and a strong partnership between our employees and their union representatives, our customers and our suppliers, and many months of hard work to get to this point. We also appreciate the help and support from both local and national government and our local MPs.
“Our industry has faced challenging times over the last few years, but we are confident that our new venture, built on our core values of pride, passion and performance, will not only reinvigorate this business, but position it as a world leader.
“Our heritage is important to us. For decades our skilled workforce has dedicated itself to producing the highest quality steel that has been used in landmark buildings and infrastructures projects around the world. The launch of British Steel will enable us to build a stronger future for both our employees and all those who do business with us.”
The business, which employs 4,800 people, has highly regarded manufacturing operations in Scunthorpe, Teesside and Skinningrove in the UK and Hayange in France. The business also includes metal centres across the UK and Ireland, a global network of sales offices, an engineering business in Workington and a national design consultancy.
Scunthorpe Site Multi Union Chairman Paul McBean said:
“Today is a momentous occasion for us, our fellow union colleagues and all our employees. Getting to this point has taken months of work and commitment from our workforce and I thank them for their support and dedication to the steel industry.
“I am delighted we are relaunching our fantastic business as British Steel. It marks a new start, a new chapter, for our business. I know that by continuing to work together we can and will make it a success.”
A £400m investment and financing package has been arranged by Greybull to support the turnaround plan being implemented by the management and employees. The financing, provided entirely by a combination of shareholders and their banks, is available to British Steel to fund working capital and future investments. The bank financing is provided by PNC Business Credit UK, part of PNC Financial Services UK Ltd., a member of The PNC Financial Services Group, Inc. Terms have also been agreed with Citi for an inventory facility.
The business started implementing a turnaround plan in autumn 2015, which has already delivered significant improvements in performance, with the business returning to operational profit over the past two months. An agreement to reset the cost base of the business has been reached with key suppliers and the workforce who recently voted in favour of temporary changes to their terms and conditions. These changes are vital to ensure British Steel can realise the full potential of the transformation plan and return the business to long-term profitability.
Greybull Partner Marc Meyohas said:
“We are delighted to have completed this deal and proud to be backing this business. We have confidence in the transformation plan and in the ability of management and the workforce to implement the required changes. Much remains to be done, but the early signs are positive.
“Over the past few months the business has overcome a series of barriers to get to this point. Throughout this time the whole workforce and the trade unions have shown great professionalism and commitment to helping the business succeed. We know this will continue as we work together to strengthen British Steel further.”
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About British Steel
British Steel is our brand new company, created with a proud heritage and a passion to build stronger futures.
Our past has always been important to us but now we’re looking to the future, maintaining world leader status in steel production. Our steel has been, and continues to be, fundamental in creating iconic, awe-inspiring structures around the world. It helps people travel, work, eat and socialise every day. More importantly, it helps keep us safe.
As British Steel, we will be more agile and easy to do business with, which means we’ll need to be more responsive, adaptable, competitive and proactive in our markets and for our customers. We know we have passionate, hard-working, ambitious and dedicated employees and together we can create a future we are all proud to be part of.
We produce more than 2.8 million tonnes of steel every year. From this, we manufacture more than 1,450 different specifications of steel that gets rolled into wire rod, sections, special profiles and rail
British Steel employs 4,800 people (4,400 in the UK, 400 in France). The business is made up of the following facilities:
Landmark Buildings that contain British Steel products
About Greybull Capital LLP
Greybull is a family investment office with significant investments in various sectors including aviation, pharmaceuticals, semiconductors, energy, industrials, retail and leisure across UK, mainland Europe and the US. Within its UK portfolio, Greybull’s associated family trusts own and control several companies including The Monarch Group, My Local, Plessey Semiconductors Limited and Arc Specialist Engineering Limited.