British Steel brought back under UK govt control

(Sharecast News) - British Steel was taken into public ownership on Thursday after the government confirmed it had stepped in to secure the future of the struggling Scunthorpebased producer.

Ministers said the move was necessary to protect thousands of jobs and safeguard a strategic industry following months of uncertainty over the company's financial position.

The decision ends British Steel's ownership under China's Jingye Group, which had warned in recent weeks that the business could not continue operating without substantial state support. The government said it had "no viable alternative" after assessing the scale of the company's losses and the urgent need to stabilise operations.

Jingye had already warned it would demand compensation for nationalisation, after it said in June last year that it planned to try to recover as much as �711m in debts owed by British Steel.

In response, the government has said it would appoint an independent valuer to assess whether any compensation is payable.

Under the plan announced on Thursday morning, the government will assume control of British Steel's core assets while work begins on a longterm restructuring programme.

Ministers described the takeover as a temporary measure but acknowledged that significant funding would be required to modernise production and accelerate the shift towards lowercarbon steelmaking. They said the move provided a "clear platform" for the company to pursue a sustainable future once market conditions improve.

Reporting by Frank Prenesti for Sharecast.com