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ICSM Business Insolvency News: the nation's steel industry is in crisis as the Scunthorpe plant is set to shut and doubts remain over two collapsed steel firms

By Harry Mottram: Sky News have been reporting on another chapter in the on-going post UK owned British Steel story on the day that Chinese owned British Steel are set to close the coking plants in Scunthorpe with the loss of 300 jobs.

It all adds up to a very disappointing time for the once mighty steel industry that at its height employed over 200,000 workers and together with the coal industry was the backbone of British industry. It’s potentially another blow to the health of the nation’s economy as it means the UK will have to import coke for the furnaces in future. An action the Government sees as ‘disappointing.’

Sanjeev Gupta

Sanjeev Gupta's GFG Alliance has taken a stake in Aartee Bright Bar Limited and Aartee Bright Bar Property Limited that are both in administration after collapsing last month. Sky News’ Mark Kleinman reported: “The steel tycoon Sanjeev Gupta has sparked a row over the administration of one of his biggest British customers after launching an attempt to take control of it. Sky News has learnt that Mr Gupta's GFG Alliance has acquired control of a Singapore-based company called Aartee Group Pte Limited which is an indirect shareholder in two UK steel companies which collapsed into insolvency last week. Sources said that GFG was expected to issue a statement later on Friday to confirm the purchase, and to say that it has filed a legal challenge to try to overturn the administration of Aartee Bright Bar Ltd and Aartee Bright Bar Property Ltd.”

ICSM Comment

ICSM’s Ian Carrotte said it was a concern to what he calls GB plc that the steel industry has been down graded over the years and is owned by overseas companies. He said: “I feel the nation’s main assets like steel, coal, power and so forth should remain owned either by the state or British based firms as it benefits the economy and a huge network of suppliers. When accountants in China or India make decisions on restructuring their first thoughts are not about the welfare of British suppliers and British workers.”

Scunthorpe's history dates to 1859 when ironstone was discovered in the area leading to the development of a major iron producing industry with several blasst furnaces and late steel production. coke and coal came by rail from Yorkshire and Durham.

Sky news

ICSM understands that Alvarez & Marsal was appointed administrator to the two steel companies when FGI Worldwide who were one of the main creditors lost patience and decided to push for the insolvency of the two businesses.

Meanwhile Sky News’ Mark Kleinman reported: “Alvarez & Marsal was appointed administrator to the two companies after Aartee's main creditor, FGI Worldwide, decided to pursue an insolvency of the businesses. Aartee buys steel bars used in sectors such as construction and employs about 250 people in the West Midlands, Rugby, Bolton, Southampton and Newport.”

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