Network Rail bids for part of British Steel that supplies rails

British Steel bailout

Network Rail is looking to buy part of British Steel, as bidders have until the end of Sunday to put in offers for all or part of the troubled firm.

The railway infrastructure company has bid for British Steel’s rail services business.

State-owned Network Rail wants to take over the division responsible for the welding, finishing and storing of rails for the UK’s train network.

British Steel was placed in compulsory liquidation in May.

‘Indicative offer’

Its collapse came after rescue talks between the government and former owner Greybull Capital, which was seeking a further loan of up to £75m, were unsuccessful.

“We have made an indicative offer for some railway critical assets although our overwhelming preference is that a purchaser for the entire business is found. We are very clear that our offer will not undermine that,” said a Network Rail spokesman.

“Our role is to safely run the railway for the millions of people who rely on it every day and we are exploring all options to make sure we can continue to do that.”

They added: “We continue to support British Steel, working with the liquidator and any new owner of the company.”

Global competition

The move by Network Rail, as first reported in the Sunday Telegraph, is just one of about 10 bids likely to be submitted to the Official Receiver, which took control of British Steel last month.

Network Rail owns and operates the UK’s railway network, including 20,000 miles of track, and buys 100,000 tonnes of rails from British Steel each year.

The UK government and the receiver are keen to sell British Steel in its entirety to one buyer,

A closure of British Steel could jeopardise 25,000 jobs, including 5,000 employed by the firm in Scunthorpe, Lincolnshire, and 20,000 in the supply chain.

There are a further 800 workers on Teesside and in north-eastern England.

Should a buyer not be found, the firm would be wound up. However, any further bids received next week could be considered.

British Steel has been facing a tough global steel market, especially in competition to China, but it attributed its current woes to Brexit and tension between the US and China.

It said it struggled with the weak pound, which took a dive after the Brexit referendum.

It was also hit by an EU decision to suspend access to free carbon permits until a Brexit withdrawal deal can be hammered out.

British Steel was given a £100m loan from the government to pay off an EU carbon bill in April.