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Potential buyers emerge for British Steel, expressions of interest due shortly

The U.K. government identified potential buyers for British Steel Corp. Ltd., which was placed under liquidation by the high court last week, the official receiver said in a May 28 statement.

Special managers from accounting firm Ernst Young were appointed to assist the official receiver and made contact with 80 potential trade purchasers of the business, sending nondisclosure agreements to 60 potential buyers. The receiver said the commercially sensitive nature of the talks meant no further information could be provided.

"Good progress is being made in identifying potential buyers for British Steel," the receiver said. "Multiple parties have signed nondisclosure agreements giving them access to a detailed information memorandum and virtual data-room that my team has developed to inform their bids. Expressions of interest are due with me by early June."

British Steel approached the government earlier in May for £70 million to £80 million in crisis funding to avert a collapse that would have led to thousands of job losses. It lowered the request to £30 million after owner Greybull Capital LLP and other lenders agreed to contribute more funds.

The government agreed in early May to provide the company with a £120 million bridging facility to enable it to meet its EU bill for carbon dioxide emission, with Business Secretary Greg Clark saying it would be unlawful to provide a guarantee to the company on anything other than a commercial basis.

Greybull Capital bought the company from Tata Steel Ltd. for £1 in 2016. Greybull Capital recently told S&P Global Market Intelligence it was aware at the time that turning British Steel around was going to be a challenge but that "additional blows dealt by Brexit-related issues" had proven too cumbersome.