British Steel’s finances questioned, causing concern.

TLDR:

– Auditors have raised concerns about British Steel’s ability to operate without new funds from its owner, Chinese firm Jingye.
– The auditors at Moore Kingston Smith resigned just days after British Steel released its delayed financial filings for 2021.
– British Steel swung to a loss of £51m in 2021, down from a £268m profit in the previous year.
– The steelmaker’s directors believe they have enough funding for the next 12 months, but auditors have expressed “material uncertainty” over its ability to continue operating without another cash injection from its Chinese owners.

The financial stability of British Steel, the UK’s second-largest steelmaker, has been called into question by auditors who warned of “material uncertainty” over the company’s ability to operate without further funding from its Chinese owner, Jingye. The warning comes after auditors at Moore Kingston Smith resigned just days after British Steel released its delayed financial filings for the year 2021. The auditors had been appointed only a year earlier. Any doubts about the company’s future could put a large number of jobs at risk, as British Steel currently employs 4,500 workers.

British Steel was rescued from collapse by Jingye in March 2020. While the steelmaker’s directors claim to have enough funding for the next 12 months, auditors have expressed concerns over its ability to continue operating without an additional cash injection from its Chinese owners. British Steel reported a loss of £51m for 2021, compared to a profit of £268m in the previous year. This loss was attributed, in part, to a surge in energy costs in October 2021, which significantly impacted the company’s product margins. The auditors also noted their inability to verify the existence of £45.8m worth of stock through alternative means.

In light of the concerns surrounding British Steel’s finances, the resignation of the auditors highlights the growing challenges facing the steel industry in the UK. Tata Steel, another major player in the industry, recently announced plans to shut down two blast furnaces at its Port Talbot steelworks, resulting in up to 2,800 job losses. The decision has been criticized by the Community union as a “devastating blow” to the sector. The uncertainty surrounding British Steel’s future adds further pressure to an industry already grappling with significant challenges.