BRITISH STEEL has gone into liquidation, putting 5,000 jobs directly at risk and endangering 20,000 in the supply chain, after talks with the government broke down over emergency funding.
The company, owned by Greybull Capital, will continue to trade while the official receiver searches for a buyer to rescue plants, including the giant steelworks at Scunthorpe and its Teesside processing centre.
At a High Court hearing in London, Mr Justice Snowden said revenue forecasts ‘indicate that the company will run out of cash by the end of the week’.
The judge said he was ‘entirely satisfied that the company is, or will in the immediate future be, unable to pay its debts’.
British Steel has a shortage of £14.8million which will increase to nearly £95million by early August, he added.
Greybull said it faced a number of Brexit-related issues.
Business secretary Greg Clark insisted the government had worked ‘tirelessly’ to explore all potential options, and was willing to consider making a loan, but there was no reasonable prospect that it would have been repaid.
He said: ‘This will be a deeply worrying time for the thousands of dedicated British Steel workers, those in the supply chain and local communities.’
Roy Rickhuss, general secretary of the Community trade union, said the liquidation ‘must be seized as an opportunity to look for an alternative future’.
Shadow business secretary Rebecca Long-Bailey said: ‘This is absolutely devastating news for the thousands of workers, their families and the communities in Scunthorpe and Teesside.’