Steelmaker ASW goes down

12 April 2012

STEELMAKER ASW has called in the receivers, jeopardising 1,300 jobs, after its banks refused further support. Shares in the company were suspended at 2 1/2p this morning following an announcement to the London Stock Exchange.

Chief executive Graham Mackenzie said staff would continue to be employed while receivers KPMG sort out the future of the business. He added: 'It will be for the receiver to decide what will happen next. Hopefully, he will find a buyer for all or part of the business.' ASW employs around 1,000 people in Cardiff, another 300 staff in Sheerness and 30 in Belfast.

Mackenzie said the final straw was the failure of talks involving lenders and credit insurers in the last three months. 'It seems arcane that a business with a viable trading plan cannot continue because of a technical dispute between banks and credit insurers,' he said.

He added the company's cash flow had not been helped by volatile trading and a surge in cheaper eastern European imports: 'There have been extreme difficulties in the steel market in the last 12 months.'

ASW said last month that it faced first-half losses and that it was in talks with its banks. It lost £6.4m last year on sales of £270m.

The company, formed in 1981, was the first business to emerge from the Government's Phoenix programme, designed to rationalise the steel industry. On formation, it acquired British Steel's interests in the manufacture of wire rod and reinforcement products and several of GKN's steel-based subsidiaries. British Steel and GKN remained the main owners until a management buy-out in October 1987.

ISTC, the steel and metal workers union which represents around 90% of ASW's UK workforce, said it was 'devastating news'. General secretary Michael Leahy added: 'The ISTC will be in close contact with all receivers and shall be seeking the best possible outcome for our members and all ASW employees.'

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