The majority of Caparo Industries’ businesses are in administration, according to reports citing people familiar with the matter, putting 1,700 jobs at risk.
The company, which has 20 sites across the UK, appointed PwC to administer some of its businesses on Monday. So far, sixteen of its businesses have gone into administration, while three subsidiaries have not.
Matt Hammond, lead administrator, from PwC said: “We will be rapidly assessing all options for the businesses through this week and beyond.
“The impact of steel prices and exchange rates has had an impact on some parts of the Caparo Industries group. However there are businesses in the group that are not directly affected by steel prices, and likewise many where there is both strong customer demand and critical supplier support.
“Our focus for the next 36 hours is on briefing staff across the group and working closely with their management teams to ensure that every opportunity for these businesses is considered. We will be working with all parties to ensure the best outcome for all creditors of each business.”
The UK steel industry is currently in crisis, with Tata Steel expected to announce up to 1,200 job cuts on Tuesday and SSI going into liquidation.
“This is yet another hammer blow for steel and manufacturing communities across the UK already reeling from the closure of Redcar (SSI) and job losses at Tata Steel,” Britain’s largest union Unite said about Caparo.
“Government ministers need to ask themselves. How many more steel firms need to go to the wall before they step in and support the UK’s steel industry? Failure to act urgently could lead to a ‘domino effect’.”
Angela Eagle, the shadow secretary of state for business, innovation and skills, said the steel industry was “on its knees”, adding that the Government “seems content to let the industry fail”.
She said: “My thoughts are with the 1,700 employees of Caparo who are facing uncertainty over their future.
“Rather than setting up more talking shops the Government should be taking action to tackle higher energy prices, they should be providing export and procurement support and be looking at what temporary measures could help the industry, including looking again at business rates.
“With the Chinese President in the UK this week, I hope the Government will raise the issue of anti-competitive dumping which is driving down steel prices.”
