Secure Trust Bank Commercial Finance has provided a £50m bilateral receivables facility to support the leading European steel manufacturer as it looks to expand production and sales over the coming months.
The steelworks, which has existed for around 150 years, supplies premium long products around the world and has facilities across the UK and Europe. In March 2020, British Steel was acquired by Jingye Group, a distinguished Chinese multi-industrial company specialising in iron and steel manufacturing.
Following the acquisition, Jingye committed to making the business more competitive and sustainable. British Steel is currently developing new products to support the UK's infrastructure drive and is investing in its existing assets to modernise plants and improve performance. This includes the development of an Electric Arc Furnace in Teesside and the construction of a new power plant to improve efficiency of the Scunthorpe site.
This £50m facility will be instrumental in supporting British Steel in growing its production and sales volumes to maximise opportunities across the market.
Paul Goodchild and John Gribbon from Secure Trust Bank worked closely with British Steel and Dominic Renshaw at PwC to understand the company's challenges and opportunities, enabling them to design a flexible facility that can adapt to suit the changing needs of the business.
John Gribbon, Regional Managing Director for Yorkshire and the North East at Secure Trust Bank Commercial Finance, commented: "Secure Trust Bank is proud to be supporting British Steel at this exciting time. We immersed ourselves within the business and used our many years of experience to create the most suitable and flexible facility for this British institution.
"The new owner, Jingye, is committed to the business, and British Steel is set to benefit from further significant investment which will transform its performance in the coming months and years."
Alex Boul, Finance Director at British Steel, adds:
"Jingye is investing £1.2bn in the transformation of British Steel and we're reassured to see Secure Trust Bank demonstrating such faith in our plans with this working capital financing agreement. In a competitive market it will provide the necessary support to our working capital, allowing us to grow our production and sales volumes in line with our investment plans."
Dominic Renshaw, from PwC's debt advisory team, concludes: "We're very pleased to have brought Secure Trust Bank and British Steel together. The team at Secure Trust have invested a lot of time with PwC and the British Steel management team to understand the growth plans for a business which plays an important role both locally and nationally. It's great to see this significant amount of funding from Secure Trust in support of British Steel and Jingye."