British Steel’s Accountants Pocket Half of £70m Proceeds From Sale

22nd November 2019 / United Kingdom
British Steel’s Accountants Pocket Half of £70m Proceeds From Sale

On the 11th November –  British Steel announced a rescue deal with China’s Jingye Group. Since May, the company has been run at a loss by the Official Receiver. British Steel’s previous owners, Greybull Capital, walked away saying that Brexit concerns had decimated forward order books and that they simply could not continue any longer. The U.K.’s No. 2 steelmaker was put into liquidation, just three years after being acquired by Greybull.

From the wreckage of having a major British manufacturing concern hit the wall with 4,000 employees and another 20,000 in the supply chain – Ernst & Young LLP is set to get up to half of the proceeds from the sale of British Steel Ltd.’s assets to China’s Jingye Group Co., the Sunday Telegraph reported.

The accountants, appointed as “special managers” by the Official Receiver in May, receive 1 million pounds ($1.3 million) per week under their contract.

Jingye last week offered 70 million pounds to buy the U.K. troubled steelmaker, subject to the completion of due diligence and regulatory approvals. Liquidators will be the first creditors in line to be paid once the deal closes, expected in January or February.

Jingye will be purchasing British Steel’s Scunthorpe plant, plus other assets in the U.K., France and the Netherlands, it said in a statement on Monday. The Chinese company said it has plans to invest 1.2 billion pounds in British Steel over the next decade but didn’t say how.

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