Gateshead steel business collapsed owing £16.9m

A TYNESIDE steel business which was placed into administration by its US owners collapsed owing £16.9m, fresh documents show.

- COREENA FORD Business writer

Union Electric Steel in Gateshead - formerly known as Davy Roll - has been producing rolled steel for more than 180 years, but earlier this year its US bosses Ampco announced plans to wind down the North East operations, citing rising costs, overseas competition and mounting losses.

An original closure date for spring 2026 was set, and union reps struck a deal with company bosses for redundancy packages for its 160 employees, many of whom have worked at the factory for decades.

However, the plant's US owners then accelerated its closure by putting the Tyneside company into administration last month - a move which wiped out the previous redundancy agreement.

Now the joint administrators - Shaun Hudson, Allan Kelly and Anthony Wright of FRP Advisory's Newcastle office - have published their report, highlighting an estimated total deficiency of £16.9m, while also showing how some creditors, including trade creditors and staff, could get just 4.8% of what they are owed.