How can the forces of change enable new alliances?

pathway leading to lighthouse at dusk static
Aerial view of lake Davos in summer Switzerland

EY at the World Economic Forum in Davos (May 22 to 26)

The World Economic Forum’s Annual Meeting explores “History at a Turning Point: Government Policies and Business Strategies.”

Find out more

Strategy, transactions and transformation

EY can help you realize your ambitions by offering a radically different approach to connecting strategy, transactions, transformation and technology, where design and delivery inform each other at every step.

Explore

Sustainability

EY is committed to making business work for sustainability and sustainability work for business. We can help you create new value from the innovation opportunity of our lifetime.

Explore

Case Study
The better the question The better the answer The better the world works
Case Study

How to determine a solid path forward in a liquidation

British Steel needed a buyer to avoid closure and to continue the iconic brand, but a sale was never guaranteed.

Case Study
The better the question The better the answer The better the world works
Case Study

Can heavy industry be reshaped for a sustainable future?

British Steel was in urgent need of a suitable buyer to avoid closure.

A sense of history comes to the fore when reshaping a traditional organization like British Steel. Since its establishment 150 years ago, British Steel has been central to European and nationwide steel production and employment in the industry. By directly and indirectly supporting 23,000 jobs, the steel plant in Scunthorpe – one of the company’s main sites, with others across the UK, France and the Netherlands – has a vital role to play in the lives and wellbeing of those connected to it.

However, steel production in the UK has tumbled from its peak in the 1970s and commercial pressures have increased in recent years, threatening these jobs and the local economy. Greater supply internationally has pushed down prices, making higher cost operators less competitive in the global markets.

As a result, heavy industry organizations like British Steel are in a state of transition. If they are to survive, these companies – and by extension the local communities they support – must transform to recover their value.

In the case of British Steel, it had become clear in 2019 that its cashflow position was no longer viable – it could no longer afford to buy necessary materials or carbon credits from the EU to let it continue trading. It was in critical need of a buyer and a fresh, sustainable business model in order to avoid closure. According to Antonius Ron Deelen, CEO of British Steel, “The real reason that British Steel got into the situation we were in before EY joined was twofold: the cashflow of the company and bad messaging; people did not see the real situation British Steel was in and, therefore, were not prepared to take the measures needed.”

In May 2019, the British High Court granted an order to place British Steel into compulsory liquidation. The Official Receiver was appointed as liquidator and he concurrently petitioned the Court to appoint Sam Woodward, Alan Hudson and Hunter Kelly of EY to act as Special Managers to assist the Official Receiver with his duties as liquidator.

  • The role of the Official Receiver and the Special Managers

    The function of the liquidator appointed by the Court is to secure all of the company’s assets, realise them and distribute proceeds to the company’s creditors.

    In the case of British Steel, the Official Receiver as liquidator was responsible for overseeing the entire liquidation process and statutory compliance, and with the assistance of the Special Managers also appointed by the Court, they together ensured the best outcome was achieved for the liquidation. EY, as Special Managers, ran parallel processes that prepared for both the wind down and closure of British Steel, as well as for the sale of the business as a going concern. The relative outcome to creditors of each scenario would ultimately dictate the future of British Steel.

British Steel’s legacy and its multi-generational workforce, who were heavily invested in the plant and its survival, made this insolvency unique. “The number of people we came across as third-generation family employees was mind-blowing,” says Sam Woodward, EY-Parthenon Turnaround and Restructuring Strategy Partner. This feeling of personal significance is echoed by Paul McBean, Community Union and Multi-Union Chairman of British Steel who says of the Scunthorpe plant, “Closure would have been devastating. We have other businesses in town, but the vast majority of businesses here rely on the steel industry.”

Both the Official Receiver and EY were aware of the importance of British Steel to its employees, suppliers, customers, local communities and the wider economy. However, emotion could not overrule legislation and the Official Receiver and EY had a role to fulfil to meet statutory obligations. Working with multiple stakeholders, EY set about devising a strategy for the liquidation that included planning for wind down and closure while in parallel assessing the possibility of realizing value from a sale of the business, in whole or in part. The ultimate aim was securing the best possible outcome from liquidation, and while the chances of a going concern sale appeared remote, the counter factual to closure needing testing.

Old railway track awaits recycling outside bsl scunthorpe plant
Case Study
The better the question The better the answer The better the world works
Case Study

In an interconnected world, think both local and global

EY’s international capabilities were crucial to delivering the best outcome.

[an error occurred while processing this directive]
A bucket tilts over a furnace mouth at bsl scunthorpe plant
Case Study
The better the question The better the answer The better the world works
Case Study

Forging a new chapter of British Steel

Fresh investment in British Steel will protect livelihoods and boost value creation.

[an error occurred while processing this directive]
New steel rails at bsl scunthorpe plant

Direct to your inbox

Stay up to date with our Editor's Picks newsletter. 

Subscribe

Featured press releases

IPO

15 MENA IPOs raise US$4 billion in Q1 2022

Dubai, 26 May 2022: According to the EY MENA IPO Eye Q1 2022 report, the MENA region saw a 400% year-on-year increase in the number of companies listing with 15 IPOs raising proceeds of US$4 billion - an increase of 1,242% in value when compared to the same period in 2021.

26 May 2022 Dubai AE

CEO agenda

97% of MENA CEOs say sustainability is important as a driver of value

Dubai, 21 March 2022: The EY CEO Survey 2022, part of the CEO Imperative Series, reports that sustainability is a key priority for almost all MENA executives, with 97% naming environmental, social and governance (ESG) principles ‘extremely or more important’ as a driver of value over the coming years, more than other parts of the world.

21 Mar 2022 Dubai AE

More press releases

Historic Year for MENA markets, with 21 IPOs raising US$7.9 billion in 2021

Dubai, 7 March 2022: According to the EY MENA IPO Eye Q4 2021 report, the MENA region saw 21 IPOs raise proceeds of US$7.9 billion in 2021, an increase of 133% in total issuances and 325% in total proceeds when compared to 2020.

7 Mar 2022

Unprecedented surge in MENA M&A activity in 2021, with 661 deals worth US$99 billion

Dubai, 16 February 2022: According to the EY MENA M&A Insights report, MENA M&A activity witnessed a major resurgence in 2021, registering an increase of 66% from 2020. These record M&A levels were primarily driven by domestic (intra-regional) deals which increased to 366 in 2021, compared to 192 deals in 2020. The report also showed that announced total M&A deal value increased by 16% in 2021 to US$99 billion from US$85.2 billion in 2020 – while the top 10 deals by value in 2021 aggregated to US$58.8 billion, 59% of total announced deal value.

16 Feb 2022

EY MENA expands consulting services with the addition of a team from PACS

Dubai, 20 December 2021: EY MENA announces the addition of the team from Pinnacle Advisory and Consulting Services (PACS), a regional management consulting firm that is specialized in business transformation, strategy execution, and team enablement.

20 Dec 2021

Next

Insights