This is the second time in 3 years that the company has been in crisis.
Greybull bought the steel works from Tata Steel for £1. That in itself should not be allowed to happen.
The company promised to invest but has not done so. The government lent it £120M to pay its carbon tax bill. The company wanted a further £30. The government has said, no, on the basis that the loan would be against state aid rules. I fail to see how the £120m was agreed in the first place.
Many of the companies problems seem to stem from the fact that Greybull were allowed to impose the cost of its takeover on to the company. Greybull also extra management fees from the company.
Why do we allow these predatory takeovers by vulture capital funds and expect it to end in anything other than tears.
I don’t buy the Government’s argument that a loan would be against state aid rules. The government in essence does not believe in bailing out failing companies. However it is generally so weak that it gets taken in by a lot of boloney from management and ends up wasting millions of pounds of taxpayers money.
We all need to know whether the company is viable in the long term given that it has to compete against exports from China where there is over-supply and manufacturers have access to unlimited government funds.
I don’t support Labour’s demand for re-nationalisation. I do want to see a 3 to 5 year plan put in place. Either the plant at Scunthorpe can survive in its current form or there needs to be a transition to some other business. One would have thought that we need steel for wind turbines and such like…..
One of the Big 4 accountants has been appointed handle the insolvency. They will make millions from that. No doubt there is a deficit on the company pension scheme and the cost of that will fall on tax payers as well.