British Steel seeks new £75m taxpayer loan to avert collapse | Business News | Sky News

British Steel seeks new £75m taxpayer loan to avert collapse | Business News | Sky News

Ministers are drawing up secret contingency plans for the collapse of British Steel amid a fresh funding crisis that could trigger thousands of job losses at its plant in Scunthorpe and intensify fears about the entire industry’s future.
Sky News has learnt that ‎insolvency experts have been placed on standby in case the UK’s second-largest steel producer cannot secure tens of millions of pounds to see it through the coming months.
The contingency plans are being drawn up as the company seeks a further loan of up to £75m from the government.
A financial support loan on commercial terms was agreed in outline with Whitehall as part of a broader package announced earlier this month, insiders claimed on Tuesday.
However, the second part of the deal was supposed to have been finalised by the end of last week, with the delay leading some existing lenders to question whether to continue backing British Steel, according to sources.
Advertisement One said that part of the company could fall into administration as soon as Wednesday.
The potentially calamitous outlook for one of the UK’s most prominent manufacturers has emerged just two weeks after it was handed £120m of taxpayer support by the Business Secretary, Greg Clark, to meet a payment deadline from Brussels.
More from Business Thomas Cook slumps to £1.46bn half-year loss as Brexit hits holiday demand Banks fined over ‘Essex Express’ foreign exchange cartels US blacklists Huawei as Trump declares ‘national emergency’ over IT threats Weller turns page with new role at Wallpaper owner Warning that HS2 costs are out of control and the project needs a major rethink Lords won’t get the answers they want to high-speed questions Image: The British Steel conglomerate bought the ailing Scunthorpe plant from Tata Steel in 2016 That bridging loan was granted in order for British Steel to pay a carbon emissions bill after UK manufacturers were frozen out of an EU-wide scheme.
The new facility is said to be being negotiated with government at an interest rate of up to 12%.
Talks involving the government, British Steel’s lenders, company executives and other stakeholders are understood to have taken place in recent days and are continuing this week.
People close to the discussions blamed a slump in orders from British Steel’s European customers ‎amid uncertainty about potential trading arrangements with the EU in the event of a no-deal Brexit for a sharp downturn in the company’s performance.
One source said that ministers had acknowledged in private discussions that the Brexit impasse had been the catalyst for the crisis at British Steel.
KPMG, the big four accountancy firm, has been advising the government on the situation.
In a worst-case scenario, British Steel’s collapse could trigger the end of steel production at Scunthorpe, according to people briefed on the discussions.
The official receiver is said to have been notified about the ongoing situation, partly because of the significant environmental risks associated with the possible decommissioning of such a major industrial site.
If British Steel does collapse, administrators would be likely to attempt to run the business as a going concern while trying to find other sources of capital.
Image: Thousands of jobs could be lost at the plant in Scunthorpe The precise timing of the new funding requirement, or of any binding decisions about the company’s future, were unclear on Tuesday.
While an insolvency could be triggered this week, firm news could still be weeks away, according to insiders.
British Steel is among the UK’s most important manufacturers, employing about 4,500 people directly and as many as 20,000‎ more in its supply chain.
More than 4,000 work at the Scunthorpe site, where the company produces steel used for railways and is Network Rail’s biggest supplier.
Sources said the company needed between £50m and £75m of new funding to support operations including the construction of a new mill.
British Steel has been adversely affected by sterling’s weakness and the prolonged uncertainty caused by the Brexit process and the escalating tariff war between the US and China, analysts said.
Last autumn, the company axed about 10% of its 5000-strong workforce in what it said was an attempt to “streamline” its operations and preserve its long-term future.
Nic Dakin, the local Labour MP, said at the time that the government had failed to provide the steel industry with adequate support.
Industry executives have cited the absence of a sector deal as part of the government’s industrial strategy as evidence of a lack of commitment to steelworkers.
The timing of the crisis could hardly be more awkward for ministers, with European parliament elections due to take place next week.
It also comes just days after a joint venture between Tata Steel and Germany’s Thyssenkrupp was abandoned amid opposition from the EU, raising renewed doubts about the future ownership of Tata’s steelworks at Port Talbot.
Image: There are now questions over the long term future of the Port Talbot works Collectively, the uncertain fate of the UK’s two largest steel plants heralds further anxiety for steelworkers, thousands of whom have already been forced to agree pay and pension cuts to keep their employers afloat.
More broadly, the British manufacturing sector has endured a torrid few months, with confirmation on Monday that Honda’s Swindon factory will close in 2021 with the loss of approximately 3,500 jobs.
People close to the latest talks about the future of British Steel said it remained possible that the company would secure the funding it required.
However, its need for further support is likely to raise urgent questions about the decision to provide it with government funding as recently as a fortnight ago, as well as the terms on which that money was provided.
One insider said it would be “bizarre” if ministers did not provide a second tranche of funding agreed as part of a single package.
They added that the taxpayer was “assured” of recouping the £120m handed to British Steel earlier this month, although they declined to give more detail about the basis on which it could be recovered in the event of an insolvency.
If the company is bailed out by taxpayers, it would preserve an important plank of the UK’s manufacturing base but would be at odds with a Conservative-led administration’s insistence that it does not pick winners in a free market economy.
The possibility that new money will not be forthcoming will spark fears about the viability of the Scunthorpe plant, which is responsible for producing 2.8m tonnes of steel each year.
Potential buyers for the business are likely to be scarce given the difficult backdrop‎ confronting the sector.
The Scunthorpe site is a pivotal part of the UK’s steel production capability, and its purchase from Tata Steel ‎by the private investment firm Greybull Capital almost exactly three years ago was seen as a landmark moment in signalling investor confidence in the industry’s prospects.
Mr Clark, who made a statement in the House of Commons on 1 May about the carbon emissions loan, said the decision to intervene was supported by the independent industrial development advisory board.
Image: Greg Clark described the decision as a ‘unique one in exceptional circumstances’ Unless the bill had been settled by the end of April, British Steel would have been hit by “an immediate and unremovable fine of half a billion pounds”, he added.
Mr Clark described the decision to purchase the necessary carbon credits on British Steel’s behalf was “a unique one in exceptional circumstances”.
Owned by private investment firm Greybull Capital, British Steel was brought back from the brink of closure after being acquired from the Indian giant Tata Steel in 2016.
The company broke even in its ‎first year after Greybull’s takeover and has reported positive earnings before interest, tax, depreciation and amortisation in each year since then.
Greybull is being advised by PricewaterhouseCoopers (PwC) on the talks, while EY, another of the big four accounting firms, has been advising the company’s lenders, which include PNC and ABN Amro.
A spokesperson for British Steel said: “As we have previously commented, the uncertainties around Brexit are posing challenges for all businesses including British Steel, and we are holding constructive discussions with our stakeholders on how to navigate them.
“Last month the company agreed a short term bridge facility with government to help it meet its EU emissions obligations, and discussions are continuing about a package of additional support to assist the company address broader Brexit-related issues, whilst continuing with its investment plans.”
KPMG and the Department for Business, Energy and Industrial Strategy both declined to comment.

Read More…

The Pakistani brides being trafficked to China – BBC News

The Pakistani brides being trafficked to China By Saher Baloch BBC Urdu, Lahore 15 May 2019 These are external links and will open in a new window Close share panel Image caption Sophia (right) married a Chinese man after her pastor made introductions The marriage between a local Christian woman and a Chinese Christian man six months ago in the eastern Pakistani city of Faisalabad had all the signs of a perfect match.
She was 19, he was 21. She was a trained beautician, he a businessman selling cosmetics.
Her family didn’t have much money but the groom generously offered to pay all the wedding expenses.
The proceedings took place in strict accordance with Pakistani customs. This pleased her parents, who felt that their daughter’s new Chinese husband respected local traditions.
There was a formal proposal, followed by a henna ceremony, and finally the “baraat”, where a procession arrives at the bride’s house, vows are exchanged and the bride leaves to start a new life with her husband.
But within a month, the woman, who only wants to be known as Sophia to protect her identity, would be back at her parents’ home. She escaped what she now believes was a racket to traffic Pakistani women into a life of sexual servitude in China.
Saleem Iqbal, a Christian human rights activist who has been tracking such marriages, said he believed at least 700 women, mostly Christian, had wed Chinese men in just over a year. What happens to many of these women is unknown but Human Rights Watch says they are “at risk of sexual slavery”. Life after a daughter’s disappearance
In recent weeks, more than two dozen Chinese nationals and local Pakistani middlemen, including at least one Catholic priest, were arrested in connection with alleged sham marriages.
Pakistan’s Federal Investigation Agency (FIA) told the BBC that “gangs of Chinese criminals are trafficking Pakistani women in the garb of marriage into the sex trade”. It said one gang posed as engineers working on a power project while arranging weddings and sending women to China for fees ranging from $12,000 to $25,000 per woman.
Christian women – who come from a mostly poor and marginalised community – are seen to be particularly targeted by traffickers, who pay their parents hundreds or thousands of dollars. Image copyright AFP Image caption There are about 2.5 million Christians in Pakistan – less than 2% of the population
China has denied that Pakistani women are being trafficked into prostitution, saying that “several media reports have fabricated facts and spread rumours”.
But it admitted this week that there had been a surge in Pakistani brides applying for visas this year – with 140 applications in the year to date, a similar amount to all of 2018. A official from the Chinese embassy in Islamabad told local media it had blocked at least 90 applications. ‘Imbalanced society’
A rise in cases of suspected bride trafficking from Pakistan to China has come amid an unprecedented influx of tens of thousands of Chinese nationals into the country. China is investing billions of dollars in the China-Pakistan Economic Corridor (CPEC), a network of ports, roads, railways and energy projects.
The two countries are close allies and a visa-on-arrival policy for Chinese nationals has also encouraged entrepreneurs and professionals not directly linked to CPEC to flood into Pakistan. More stories from Pakistan The long road to justice for student stabbed 23 times
Some are believed to be making the journey to find a bride. Researchers say that the legacy of China’s decades-long one-child policy and accompanying social preference for boys has been to create an imbalanced society where millions of men are unable to find wives.
For years this has fuelled bride trafficking from several poor Asian countries, including Vietnam, Myanmar and Cambodia – where activists say many women are promised jobs in China but then sold into marriage. It appears that easy access to Pakistan may have created a new trafficking hotspot. Image copyright AFP Image caption More than two dozen Chinese nationals accused of luring girls into fake marriages have recently been arrested
The FIA’s investigations and BBC interviews with activists and victims suggest that some Pakistani clergy are playing a role in identifying local brides and certifying the religious credentials of the Chinese suitors.
After the weddings, the couples take up residence in a number of bungalows rented by suspected traffickers in Lahore and other cities. From there, they are sent to China. A house in Lahore
Sophia began to feel uncomfortable about her marriage before it had even happened. She was made to undergo medical tests ahead of the formal proposal and the broker then pushed for the wedding to happen immediately.
“My family felt uncomfortable with this haste, but he said the Chinese would pay for all of our wedding expenses,” she says. The family gave in. Image caption Sophia only managed to escape after her parents came to Lahore to rescue her
A week later she found herself at a house in Lahore with several other newly-wed couples who were waiting for their travel documents to be processed. The Pakistani women spent most of their time learning Chinese.
It was at this point she learned that her husband was not a Christian, nor was he interested in committing himself to her. They could barely communicate due to the language barrier but he repeatedly demanded sex.
She decided to leave after speaking to a friend who had moved to China for marriage. She told Sophia she was being forced to have sex with her husband’s friends,
But when Sophia confided in the marriage broker, he was furious. He said her parents would have to pay back the cost of the wedding, including fees paid to a local pastor for arranging the match and conducting the ceremony.
Her parents refused to pay and travelled to Lahore to rescue her. Her handler eventually relented. Image copyright AFP Image caption Chinese companies are investing billions in Pakistan – and thousands of workers have arrived in recent years
Although recent police raids have focused attention on the trafficking of poor Christian girls, the BBC has found that Muslim communities are also affected.
A Muslim woman from a poor Lahore neighbourhood who went to China with her husband in March says she had to put up with repeated physical abuse because she refused to sleep with his “drunk visitors”.
“My family is quite religious, so they had agreed to the proposal because it was brought by the cleric of a seminary which is located in our neighbourhood,” the woman, who wanted to be known as Meena, said.
“But once in China, I discovered that my husband was not a Muslim. In fact he did not adhere to any religion. He made fun of me when I prayed.”
When she refused to have sex with men on his orders, she was beaten up and threatened.
“He said he had bought me with money and I had no choice but to do what he asked me to do; and that if I didn’t do it, then he would kill me and sell my organs to recover his money.” ‘A few criminals’
Meena was rescued in early May by Chinese authorities on the request of Pakistan embassy officials who had been alerted by her family.
A senior FIA official in Faisalabad, Jameel Ahmed Mayo, told the BBC that women deemed not “good enough” for the sex trade were at risk of organ harvesting.
The FIA has not provided evidence to corroborate the allegations and Beijing has firmly denied such practices are occurring.
“According to investigations by the Ministry of Public Security of China, there is no forced prostitution or sale of human organs for those Pakistani women who stay in China after marriage with Chinese,” the Chinese embassy in Islamabad said in a statement.
It did stress, however, that joint investigations with the Pakistani authorities were ongoing, adding: “We will never allow a few criminals to undermine the friendship between China and Pakistan or hurt the friendly feelings between the two people.”
Additional reporting by Mohammad Zubair Khan Related Topics

Read More…

Trump declares emergency over IT threats – BBC News

Image copyright EPA Image caption Donald Trump signed the order on Wednesday President Donald Trump has declared a national emergency to protect US computer networks from “foreign adversaries”.
He signed an executive order which effectively bars US companies from using foreign telecoms believed to pose national security risks.
The order does not name any company, but is believed to target Huawei.
The Chinese tech giant said restricting its business in the US would only hurt American consumers and companies.
Media playback is unsupported on your device Media caption One potential problem with 5G tech may have more to do with castles than you’d expect Several countries, led by the US, have raised concerns in recent months that Huawei products could be used by China for surveillance, allegations the company has vehemently denied.
The US has been pressuring allies to shun Huawei in their next generation 5G mobile networks.
What is President Trump’s strategy? Huawei: The world’s most controversial company? The next US-China battleground In a separate development, the US commerce department added Huawei to its “entity list”, a move that bans the company from acquiring technology from US firms without government approval.
The moves are likely to worsen tensions between the US and China, which had already escalated this week with tariff hikes in a trade war.
Huawei has been at the epicentre of the US-China power struggle that has dominated global politics over the past year.
What does the order say? According to a White House statement, Mr Trump’s order aims to “protect America from foreign adversaries who are actively and increasingly creating and exploiting vulnerabilities in information and communications technology infrastructure and services”.
It gives the secretary of commerce the power to “prohibit transactions posing an unacceptable risk to the national security”, the statement adds.
Image copyright Reuters Image caption Huawei is the world’s largest maker of telecoms equipment The move was instantly welcomed by Federal Communications Commission Chairman Ajit Pai, who called it “a significant step toward securing America’s networks”.
The US had already restricted federal agencies from using Huawei products and has encouraged allies to shun them, while Australia and New Zealand have both blocked the use of Huawei gear in 5G networks.
In April 2018 another Chinese tech company, ZTE, was barred from buying US parts after it was placed on the same “entity list”. It resumed business after reaching a deal with the US in July.
How has Huawei responded? Huawei has said its work does not pose any threats and that it is independent from the Chinese government.
“Restricting Huawei from doing business in the US will not make the US more secure or stronger,” the company said in a statement.
The US cannot crush us, says Huawei boss “Instead, this will only serve to limit the US to inferior yet more expensive alternatives, leaving the US lagging behind in 5G deployment, and eventually harming the interests of US companies and consumers.”
The company also said “unreasonable restrictions” on Huawei raised “other serious legal issues”.
During a meeting in London on Tuesday, Huawei chairman Liang Hua said it was “willing to sign no-spy agreements with governments” as concerns over the security of its products used in mobile networks continued to grow.
What does the national emergency mean? By declaring a national emergency President Trump can effectively bypass other branches of government and gains access to a raft of special powers.
The Brennan Center for Justice, a non-partisan public policy institute, has compiled a list of more than 120 legal powers the president can use in such an event – they range from taking over farmland to calling up military reservists or seizing property with few or no restrictions.
President Trump has now declared five national emergencies, including most recently over the southern US border.
A rolling list of national emergencies compiled by the centre shows there are now 33 active national emergencies in the US .
The oldest emergency still in place was signed by President Jimmy Carter in November 1979 as a response to the Iran hostage crisis. Others signed by Presidents Bill Clinton, George W Bush and Barack Obama also remain in effect.
The other US move that could hurt Huawei more President Trump does not name or single out Huawei in his executive order but the intent is clear: keep the company out of the US. What is more – this comes against the backdrop of an escalating trade war – and will no doubt inflame tensions between the two countries.
Huawei consistently says that if the US bans Huawei from its networks, they are the ones to lose out, not Huawei. That is true. Even without the US market, Huawei is likely to control 40-60% of the networks around the world, industry analysts say.
But what may hurt Huawei more is the US decision to put them on the “entity list” – effectively banning American suppliers from selling to the firm.
Huawei may not need the US market, but it certainly needs the key components that it gets from the US.
What about the trade war? President Trump has complained about China’s trading practices since before taking office in 2017.
The US more than doubled tariffs on $200bn (£154.9bn) of Chinese goods on Friday and China retaliated with its own tariff hikes on US products.
This escalated the situation which only recently seemed to be nearing a conclusion.
However, stock markets steadied on Wednesday as hopes rose that the two countries might resume talks next month as Mr Trump said he expected to meet Chinese President Xi Jinping at the G20 summit in Japan.
China’s foreign ministry spokesman Geng Shuang also said that the two men “maintain contact through various means”.

Read More…

Phoenix cost soars by another $137M, paid to IBM News

Phoenix cost soars by another $137M, paid to IBM Social Sharing Ottawa Phoenix cost soars by another $137M, paid to IBM The federal government continues to pay millions of dollars more than expected to IBM to run the troubled Phoenix pay system, despite its many problems. Social Sharing Total value of contract increased from $5.7M to more than $393M within 8 years CBC News · Posted: May 15, 2019 4:00 AM ET A protester wears a ‘Burnt by Phoenix’ sticker on her forehead during a rally against the Phoenix payroll system outside the offices of the Treasury Board of Canada in 2018. (Justin Tang/Canadian Press)
The federal government continues to pay millions of dollars more than expected to IBM to run the troubled Phoenix pay system, despite its many problems.
Since the start of 2019, the company has received at least another $137 million, according to the federal government’s online procurement site Buy and Sell, under a new agreement that came into effect in March.
The deal marks the 46th amendment to the initial contract, signed in 2011, with the multinational company which was responsible for the payroll system’s implementation. The total value of the contract has since increased from $5.7 million to more than $393 million.
Phoenix has been mired in controversy since its introduction in 2016, causing myriad problems including under-, over- and non-payment for hundreds of thousands of public servants .
Under the new fixed-cost contract extension, approximately 170 IBM employees will be integrated into the federal public service for up to three years to stabilize the pay system.
They will handle day-to-day operations of the Phoenix system, according to Pierre-Alain Bujold, spokesperson for Public Services and Procurement Canada (PSPC). In particular, the IBM employees will be responsible for technical support, updating and improving Phoenix, and will also be assigned to payroll processing.
“PSPC relies on the expertise of IBM resources which are responsible for delivering specific results at a fixed cost,” Bujold wrote in an email, in French, to Radio-Canada.
He said having IBM personnel take on those roles frees up others to make strategic improvements.
It’s not clear how much of the $137 million is earmarked for payroll.
In a statement to Radio-Canada, IBM said it “does not publicly discuss … staffing specifics.” ‘Forced’ to go back
Stéphane Aubry, vice-president of the Professional Institute of the Public Service of Canada (PIPSC), which represents more than 60,000 public service employees, said he was surprised at the additional costs.
“We don’t like the fact that, again, the government is forced to put more money [into the system], to find a solution,” said Aubry, who also works as a programmer for the federal government.
“The way Phoenix was developed, put in place … we’re kind of forced to always go back to [IBM] to improve, correct the system and maintain it on a daily basis.” One of Canada’s biggest public service unions wants a permanent fix to the Phoenix fiasco.0:42
However, he admits the additional resources provide some relief internally, since they will lighten repetitive administrative tasks, allowing the experts to focus on solving the problems caused by the Phoenix system.
Last year, federal officials told CBC News that the integration of IBM employees into the public service made them fear for their jobs. IBM awarded a further $36.5M to ‘stabilize’ failed Phoenix pay system
The federal government says replacing Phoenix remains a priority, though the amount of money poured into fixing it remains significantly higher than that invested to find an alternative.
In the 2018 budget, Ottawa allocated $16 million over two years to begin the process of replacing the troubled system. That funding is set to be spent over a six-year period and is for hiring additional staff.
The last federal budget, however, did not include any additional money for replacing the current system. Election issue
Another union, the Public Service Alliance of Canada, has already declared its intention to make Phoenix a central issue in the federal election campaign.
But PIPSC is opting for a different strategy. It’s continuing to push the government to find a solution before the October election, said Aubry.
But, if a solution isn’t found, he also expects Phoenix to be an election issue. Phoenix fix approaching $1B as feds look at scrapping system
“The Liberals had their chance in preventing that fiasco [from happening]. They didn’t. The previous government, the Harper government, had their chance in developing a system that would have worked properly on day [one],” he said.
“At the end we want a system that will work independent of who is the government of the day.”
With files from Estelle Côté-Sroka

Read More…

Exercise, not pills, better at preventing dementia | CBC News

If you want to save your brain, focus on keeping the rest of your body well with exercise and healthy habits rather than popping vitamin pills, new guidelines for preventing dementia advise.
About 50 million people currently have dementia, and Alzheimer’s disease is the most common type. Each year brings 10 million new cases, says the report released Tuesday by the World Health Organization.
Although age is the top risk factor, “dementia is not a natural or inevitable consequence of aging,” it says.
Many health conditions and behaviours affect the odds of developing it, and research suggests that a third of cases are preventable, said Maria Carrillo, chief science officer of the Alzheimer’s Association, which has published similar advice.
Since dementia is currently incurable and so many experimental therapies have failed, focusing on prevention may “give us more benefit in the shorter term,” Carrillo said.
The Goods What is dementia? A primer on this complex condition Smoking linked to higher dementia risk Much of the WHO’s advice is common sense, and echoes what the U.S. National Institute on Aging says.
That includes getting enough exercise; treating other health conditions such as diabetes, high blood pressure and high cholesterol; having an active social life, and avoiding or curbing harmful habits such as smoking, overeating and drinking too much alcohol. Evidence is weak that some of these help preserve thinking skills, but they’re known to aid general health, the WHO says.
Eating well, and possibly following a Mediterranean-style diet, may help prevent dementia, the guidelines say. But they take a firm stance against vitamin B or E pills, fish oil or multi-complex supplements that are promoted for brain health because there’s strong research showing they don’t work.
“There is currently no evidence to show that taking these supplements actually reduces the risk of cognitive decline and dementia, and in fact, we know that in high doses these can be harmful,” said the WHO’s Dr. Neerja Chowdhary.
“People should be looking for these nutrients through food … not through supplements,” Carrillo agreed.
Video Balancing risky behaviour, independence is goal of innovative seniors care home ‘Every life should have joy, including lives with dementia’ The WHO also did not endorse games and other activities aimed at boosting thinking skills. These can be considered for people with normal capacities or mild impairment, but there’s low to very low evidence of benefit.
There’s not enough evidence to recommend antidepressants to reduce dementia risk although they may be used to treat depression, the report says. Hearing aids also may not reduce dementia risk, but older people should be screened for hearing loss and treated accordingly.
There was substantial evidence that there were things people could do to reduce the risks, Carrillo said.
“Start now. It’s never too late or too early to incorporate healthy habits.”

Read More…