Caparo: Administrator gets flood of inquiries about stricken steel maker

The West Midlands-based business called in PwC as administrators for 16 of its 20 businesses on Monday, putting 1,700 people at risk of redundancy

Caparo, in the shadow of the Tata Steel processing plant in Scunthorpe; the firm employs 1,700 people (Getty)

The stricken UK steel maker Caparo Industries could be saved from the scrapheap after administrators said a number of parties had expressed interest in buying the failed parts of the company.

The West Midlands-based business called in PwC as administrators for 16 of its 20 businesses on Monday, putting 1,700 people at risk of redundancy.

“It’s amazing really. We’ve had expressions of interest coming from all manner of different parties,” PwC regional chairman Matt Hammond, who is Caparo’s administrator, told the BBC.

Mr Hammond said most interest was from British companies looking at buying parts or the whole of the business.

Caparo was founded by the Labour peer Lord Paul and is made up of 20 different divisions, 16 of which have been placed in administration.

Staff will still be paid while PwC carries out an assessment, which could take up to two weeks.

The glimmer of light came on a dark day for the UK steel industry after Tata Steel confirmed it was slashing 1,200 jobs across plants in Scunthorpe and Scotland.

A total of 900 jobs will go in Scunthorpe after the company said it would mothball the plate mills and close two coke ovens at the site.

The axe will fall on 270 jobs in Scotland, made up of 225 at the Dalzell plate works in Motherwell and 45 roles at Clydebridge in Cambuslang.

Scotland’s First Minister, Nicola Sturgeon, has put together a taskforce to try to find a buyer for the Motherwell and Cambuslang sites. She will visit them tomorrow to meet trade unions and workers.

In England, the Business Secretary, Sajid Javid, addressed urgent questions over the job losses in the Commons but admitted there were “limits” to what the Government could do.

Mr Javid held a summit of industry leaders and policymakers last Friday to seek ways to lessen the crisis for UK steel manufacturers.

Karl Koehler, Tata’s chief executive for European operations, said: “The UK steel industry is struggling for survival in the face of extremely challenging market conditions.”

He called on the European Commission to crack down on unfairly traded imports to make the steel trade fairer, pointing to concerns about Chinese makers dumping cheap steel on global markets.

A slump in Chinese domestic demand has sparked a glut of steel which exporters are offloading overseas at cheap prices, making the economics of the industry unsustainable for many companies.

“It’s like holding back the tide,” CRU research manager Chris Houlden said. “This is the culmination of things over a long period of time. I would expect more companies to get into trouble globally.”

Prime Minister David Cameron has promised to raise the issue during Chinese Premier Xi Jinping’s four-day state visit to the UK.

Unions, including Unite and the steelworkers’ union Community, have criticised the Government’s response to the crisis. Unite assistant general secretary Tony Burke said: “A failure to act and tackle the dumping of cheap Chinese steel will spell the end of steel in the UK.”