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Caparo steel goes into partial administration Caparo steel goes into partial administration
(about 2 hours later)
Administrators from PwC have been appointed to run some parts of the Caparo group empire.Administrators from PwC have been appointed to run some parts of the Caparo group empire.
Unions say cheap steel from abroad may be the cause. Unions say cheap steel from abroad may be responsible for its collapse.
Reports of 1,800 redundancies are wide of the mark and workers will get paid, according to BBC sources. Reports of 1,800 redundancies are wide of the mark and workers will be paid, according to BBC sources.
UK steel is under extreme pressure. Steel giant Tata is expected to announce major job losses on Tuesday. Recently the UK's second largest steelmaker, SSI, went into liquidation. The UK steel's sector is under extreme pressure, with Tata Steel expected to announce major job losses on Tuesday and the UK's second-largest steelmaker, SSI, going into liquidation.
PwC has taken over 16 out of 20 units within the group, the accountancy firm said.PwC has taken over 16 out of 20 units within the group, the accountancy firm said.
SSI's collapse had been associated with the loss of over 2,000 jobs and thousands more indirectly related to steelmaking.SSI's collapse had been associated with the loss of over 2,000 jobs and thousands more indirectly related to steelmaking.
"Employees across these entities of the Caparo Industries group totalling just over 1,700, will be briefed on the impact of administration at the businesses. Staff are attending work as normal and will be paid as normal, so in these respects it is business as usual while the Administrators' review gets underway," PwC said in an emailed statement. "Employees across these entities of the Caparo Industries group totalling just over 1,700, will be briefed on the impact of administration at the businesses. Staff are attending work as normal and will be paid as normal, so in these respects it is business as usual while the administrators' review gets underway," PwC said.
Matt Hammond, lead administrator and partner at PwC, said: "This is a significant business with a wide range of interests across steel, engineering, vehicles products and technologies. Its scale and reach into significant customers and its importance to suppliers cannot be understated. We will be rapidly assessing all options for the businesses through this week and beyond."Matt Hammond, lead administrator and partner at PwC, said: "This is a significant business with a wide range of interests across steel, engineering, vehicles products and technologies. Its scale and reach into significant customers and its importance to suppliers cannot be understated. We will be rapidly assessing all options for the businesses through this week and beyond."
Demand Demand falls
A collapse in steel prices and movements in exchange rates has had an impact on some parts of the Caparo Industries group, said PwC.A collapse in steel prices and movements in exchange rates has had an impact on some parts of the Caparo Industries group, said PwC.
"However there are businesses in the group that are not directly affected by steel prices, and likewise many where there is both strong customer demand and critical supplier support," said the administrators."However there are businesses in the group that are not directly affected by steel prices, and likewise many where there is both strong customer demand and critical supplier support," said the administrators.
"Our focus for the next 36 hours is on briefing staff across the group and working closely with their management teams to ensure that every opportunity for these businesses is considered. We will be working with all parties to ensure the best outcome for all creditors of each business.""Our focus for the next 36 hours is on briefing staff across the group and working closely with their management teams to ensure that every opportunity for these businesses is considered. We will be working with all parties to ensure the best outcome for all creditors of each business."
TUC General Secretary Frances O'Grady said: "One in six UK steelworkers face losing their jobs. At this rate there won't be a British steel industry in a year's time. "Ministers cannot afford to stand on the sidelines and watch this crisis unfold. They must step in now with a rescue package." TUC general secretary Frances O'Grady said: "One in six UK steelworkers face losing their jobs. At this rate there won't be a British steel industry in a year's time. Ministers cannot afford to stand on the sidelines and watch this crisis unfold. They must step in now with a rescue package."