Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education

Front Page



UK Politics







Talking Point
On Air
Low Graphics

Thursday, December 24, 1998 Published at 11:16 GMT

Business: The Company File

Steel jobs on the line

ASW says staff will be told about job cuts first

Further job losses in Britain's steel industry look inevitable after steelmaker ASW announced it was taking over a rival manufacturer.

Cardiff-based ASW said there would be job cuts from the £40m deal for Kent-based Co-Steel Sheerness but declined to give further details.

ASW employs 2,800 staff at its three Cardiff mills while the Sheerness plant, based on the Isle of Sheppey in Kent, has 580 workers.

A spokeswoman for loss-making ASW said: "There will be job losses eventually but the company will tell staff first. There is no confirmation of figures yet."

[ image: ASW hopes the takeover will cut costs and boost profits]
ASW hopes the takeover will cut costs and boost profits
Sheerness, which was formed in 1972, is based on the Isle of Sheppey in Kent and is one of the largest mini steel mills in Europe.

ASW is smaller than Sheerness and the move is classed as a reverse takeover under Stock Exchange rules.

George Duncan, chairman of ASW, said: "The acquisition of Co-Steel Sheerness presents a unique opportunity to create a position of product market leadership in the UK.

"This transaction also provides the opportunity for rationalisation which will transform the cost structure of the enlarged group, which is already one of the most competitive steel producers in Europe."

The deal is backed by complex financing from venture capital company Candover Partners.

There will be a share offer to raise £17m while Candover will provide a £29m loan which is convertible into shares.

This could leave Candover holding up to 54% of the enlarged company.

The group will use some of the money raised to pump £14.5m into its ailing French subsidiary SAM.

Shares suspended

ASW shares were suspended on the stock market earlier this week when it announced a reverse takeover could take place.

Stocks will be relisted once its proposals have been approved and the takeover completed.

Stockbroker Albert E Sharpe will underwrite part of the share offer.

The integration of the two businesses will be led by Graham Mackenzie, former chief executive of United Engineering Steels. He will join the enlarged group as chief executive.

Advanced options | Search tips

Back to top | BBC News Home | BBC Homepage | ©

The Company File Contents

Relevant Stories

10 Dec 98 | The Economy
Job losses nationwide

In this section

Microsoft trial mediator welcomed

Vodafone takeover battle heats up

Christmas turkey strike vote

NatWest bid timetable frozen

France faces EU action over electricity

Pace enters US cable heartland

Mannesmann fights back

Storehouse splits up Mothercare and Bhs

The rapid rise of Vodafone

The hidden shopping bills

Europe's top net stock

Safeway faces cash demand probe

Mitchell intervenes to help shipyard

New factory creates 500 jobs

Drugs company announces 300 jobs

BT speeds internet access

ICL creates 1,000 UK jobs

National Power splits in two

NTT to slash workforce

Scoot links up with Vivendi

New freedom for Post Office

Insolvent firms to get breathing space

Airtours profits jump 12%

Freeserve shares surge

LVMH buys UK auction house

Rover - a car firm's troubles