Greybull Capital plans to snap up British Steel's European assets

Reports suggest that Greybull, which bought British Steel for £1 from Tata three years ago, intends to merge those continental operations with French steelmaker Ascoval, which it acquired last month in order to supply basic material to British Steel’s Hayange factory in France and FN Steel in the Netherlands.

These two plants had been supplied with materials from British Steel's main Scunthorpe plant in the UK, which Greybull now intends to ditch along with its other British assets.

The plan is unlikely to be popular with unions, who want the business to be sold without being split apart in order to ensure the best chance of survival.

Alasdair McDiarmid, operations director at the UK steelworkers’ union Community, told the Financial Times: "The steelmaking supply chain must be retained and the business kept together to protect jobs across Europe."

Roughly 5,000 jobs were put at risk when British Steel went insolvent in May, with its largest business unit, British Steel Limited, being placed in compulsory liquidation after the government chose not to provide the business with an emergency £75m loan.

This came just weeks after the firm received a £120m in government funding to help pay its EU carbon emissions bill, allowing it to avoid a fine of more than £600m.

In the meantime, British Steel has been taken over by the Official Receiver in the hopes that a buyer can be found.