BS’ French unit exits liquidation with Greybull funding

British Steel’s French subsidiary, British Steel Saint Saulve (known as B3S), has been taken out of liquidation by a French court ruling, B3S’s CEO said Wednesday.

The Strasbourg High Court has approved an investment plan backed by private investor Greybull Capital — British Steel’s former owner — the French state and others, which makes B3S (formerly known as Ascoval) completely operational, the French company’s CEO Cedric Orban told S&P Global Platts.

The court has accepted a request filed by Olympus Steel Ltd., which is owned by Greybull, and B3S to modify B3S’s rehabilitation plan and allow it to exit liquidation proceedings via an investment program totaling EUR94.5 million ($105.30 million), B3S said in a statement. The approval follows a court hearing on the subject last Friday, it said.

Of the total rescue package, EUR47 million is being put up by Olympus Steel, a shareholder in B3S, and private banks, the B3S statement said.

The French state is putting up EUR25 million, the City of Valenciennes, where BS3 is based, is putting up EUR10 million and other French regions EUR12 million, it said.

Of the total, EUR20 million has already been invested by B3S and the French state since May 15 this year and a further EUR17.5 million tranche has now been liberated by the Strasbourg court to be put up by Olympus Steel, the French regions and Valenciennes in August, B3S said.

“The B3S financing accords have all been concluded,” the company said. “A sales development plan is progressing.”

News of B3S’s exit from liquidation follows speculation that British Steel — the UK’s second biggest steelmaker, which entered compulsory liquidation late May — might be sold in separate parts rather than a single unit. Greybull Capital originally acquired the 3 million mt/year-capacity British Steel in 2016 from Tata Steel for GBP 1, and had been publicly eyeing British Steel’s French unit since the equity firm failed to get funding support earlier this year from the UK government for the UK-based operations. British Steel then plunged into liquidation on an order from the UK High Court.

B3S, as Ascoval, had been troubled for many years and was the subject of court proceedings before British Steel acquired it for EUR47.5 million earlier this year. A Strasbourg court had previously searched for a buyer.

B3S’s crude steelmaking production capacity was recently stated at 250,000-500,000 mt/year. Current production levels are 8,000 to 10,000 mt/month, a company spokesman said Wednesday.

The electric arc furnace-based steelmaker produces continuous-cast round bars in both carbon and alloy grades, including for pipemakers.

B3S’s new business plan foresees an investment to enlarge its product range to include square billets and blooms, according to Wednesday’s statement. “Discussions with equipment suppliers are being finalized and the investments foreseen will be operational in August 2020,” it said.

The company is also seeking to develop strategic partnerships, possibly with large customers, on which it may have news in October, according to the statement. Large customers have recently included tubemaker Vallourec and steel products manufacturer Schmolz + Bickenbach, according to information previously given to Platts by Ascoval.

— Diana Kinch