British Steel’s private equity owner faces questions over its decision to pump £42m into a French steelworks as it begged Westminster for cash to save its Scunthorpe plant.
The secretive buyout fund Greybull Capital bought the Ascoval mill in northern France out of insolvency, saying it would invest €47.5m (£41.7m). The French state is injecting a further €47m.
The deal came in the middle of fraught talks with ministers over a £75m bailout for British Steel, where orders have plunged amid Brexit uncertainty. Greybull has already secured a £120m government loan to cover the cost of carbon credits, whose release has been delayed by the European Commission.
Last week, the Scunthorpe plant’s 4,000 staff won a temporary reprieve when Greybull and its lenders agreed to pump in money to keep the business afloat. Greybull refused to say how much it had put in. “It’s a temporary measure,” said an industry source. “It does not give a huge deal of confidence in the long-term future . . . Why on earth did they buy Ascoval when everything else hangs by a thread?”