Britain's second biggest steel maker collapsed on Wednesday (22 May), putting about 5,000 jobs at the company directly at risk, and threatening another 20,000 at suppliers. The company was seeking a government bailout, but talks ended without agreement. The High Court ordered the company into compulsory liquidation, according to the government's Insolvency Service.British Steel was reportedly seeking a government loan of £75 million ($95m) to cover losses it suffered because orders from the European Union had evaporated due to the uncertainty surrounding Brexit. "Unable to decipher the trading relationship the UK will have with its biggest market in just five months' time, planning and decision making has become nightmarish in its complexity," UK Steel, the industry's trade association, said in a statement.
British Steel, which had already been granted a government loan of £120m ($152m) last year, was bought by investment firm Greybull Capital from India's Tata Steel in 2016 for just £1.
The government said it has appointed EY to try to find a new owner for the company. British Steel will continue to operate and its workers will be paid while the search continues.
"Failure to find a buyer would be devastating to many areas which rely so strongly on this industry," said Hannah Essex, co-executive director of the British Chambers of Commerce.
The GMB labor union said the UK government should have considered all options, including nationalization, in order to save the company.
"But they either don't care or wouldn't take off their ideological blinkers to save hard working people and communities," said Tim Roache, GMB's general secretary. European steel makers have been under pressure because of cheap competition from China. The European Commission put anti-dumping measures on Chinese steel in 2017, and extended them in 2018 after an investigation showed the practice of flooding the market with steel priced below production cost was continuing
