British Steel has gone into liquidation today.
The Government's Official Receiver will take control of the company as part of the insolvency process.
Accountancy firm EY will take on the role of Special Manager and attempt to find a buyer for the business.
More than 4,000 British Steel employees could become redundant with 20,000 workers from the supply chain, also facing potential job loss.
Reports suggest the firm had asked for £30m from the Government. The companies major shareholder, Greybull Capital, is to chip in with extra funding of £30m. Currently, the Government has been unable to match the request.
Greybull Capital, which specialises in turning around struggling businesses but failed to save Monarch Airlines, paid a nominal £1 to the loss-making company’s previous owner, Tata Steel, in 2016, and renamed it British Steel.
Brexit uncertainties have been blamed for the crisis but the slowdown in China's economy and US tariffs have played their part.
If you are worried about redundancy, in the event of insolvency, then watch the video below
Worried about poor cashflow? Covid-19?, How to pay wages on pay day? For expert advice on a range of issues download our free Ultimate Guide For Worried Directors today. Or just call us on 0800 9700539
Please note that the guide was mostly written pre Covid-19 and there have been some changes to insolvency legislation that limits creditors actions and relaxes rules regarding wrongful trading. A new 20 day moratorium for distressed businesses has also been introduced.