MECX Group News

British Steel Provided a Lifeline after Bid From Network Rail

Network Rail has submitted an indicative bid in an attempt to take over certain aspects of British Steel in an attempt to turn around the poor performing business, which has a future that is looking bleak.

If British Steel was to collapse and close, then it would have a significant impact on the rail network, and that is why Network Rail wants to save the business.

If no other buyers can be found, then Network Rail will continue with the bid. They would look to take control of how welding, finishing and storing rails are managed, in line with the requirements or the rail network in the UK.

However, it has been reported that as many as ten businesses could bid to take over the company. Despite this, the reluctant bid from Network Rail could disrupt the bidding process.

Network Rail have commented on the surprise bid, stating that they want to continue to support British Steel, whereby it wants to work with the liquidator and the new owner of the company. The bid has been made for some of the critical assets that the railway network relies on. However, the preference is that an alternative purchaser is found for the business. They have made it clear that their offer would undermine with the role of Network Rail being to safely run the railway for millions of people. This ensures that they can continue to rely on it every day and so, to continue that, they are exploring all option.

The government has said that it would prefer to sell the company completely to one buyer instead of breaking up the business and allowing Network Rail to manage certain areas of it.  In May, British Steel went into administration following failed talks between the owners and the government.

In April, the government loaned the business £100m in order to pay off an EU carbon bill but competition from overseas has resulted in the business struggling to compete. If British Steel closes, then it could result in 25,000 jobs being put at risk with many of those being in the supply chain.

 

 

 

 

Deborah Lillis

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