British Steel has secured a £50 million loan as it looks to expand production and sales in the coming months.
Secure Trust Bank Commercial Finance has provided the funds, stating the facility will be “instrumental in supporting British Steel in growing its production and sales volumes to maximise opportunities across the market”.
It comes virtually a year since Jingye Group agreed a deal with the Official Receiver to buy the Scunthorpe-headquartered business.
The West Midlands lender said it had worked with PwC to understand the company’s challenges and opportunities, underlining the long heritage and premium long products it supplies around the world.
Secure Trust Bank’s regional managing director for Yorkshire and the North East, John Gibbon, said: “Secure Trust Bank is proud to be supporting British Steel at this exciting time. “We immersed ourselves within the business and used our many years of experience to create the most suitable and flexible facility for this British institution.
“The new owner, Jingye, is committed to the business, and British Steel is set to benefit from further significant investment which will transform its performance in the coming months and years.”
The bilateral receivables facility will aid the work to develop new products to support the UK’s infrastructure drive to ‘build back better’ with HS2 a key project on the radar.
When taking over British Steel in March, Jingye committed to supporting the modernising of plant and improvement of performance, with the development of an electric arc furnace in Teesside and the construction of a new power plant to improve efficiency in Scunthorpe.
British Steel is also a core partner in the Zero Carbon Humber proposal currently with government, which plans to turn one of the most carbon intensive clusters in Europe to a Net Zero exemplar.
Alex Boul, finance director at British Steel, said: “Jingye is investing £1.2bn in the transformation of British Steel and we’re reassured to see Secure Trust Bank demonstrating such faith in our plans with this working capital financing agreement.
“In a competitive market it will provide the necessary support to our working capital, allowing us to grow our production and sales volumes in line with our investment plans.”
Mr Gibbon and colleague Paul Goodchild worked closely with Dominic Renshaw, debt and capital advisory director at PwC in Manchester, on the deal. He said: “We’re very pleased to have brought Secure Trust Bank and British Steel together. The team at Secure Trust have invested a lot of time with PwC and the British Steel management team to understand the growth plans for a business which plays an important role both locally and nationally.
“It’s great to see this significant amount of funding from Secure Trust in support of British Steel and Jingye.”
Solihull headquartered Secure Trust supports 1.6 million customers, with a £2.3 billion lending portfolio and deposits of £2 billion. It employs nearly 1,000 people and has traded for almost 70 years.