British Steel could collapse TODAY: Firm is on brink of collapse with 25,000 jobs on the line as it struggles to secure government loan
- Britain’s second-largest steel producer may not get government loan it needs
- Could mean 4,000 redundancies at Scunthorpe plant and more than 20k others
- Comes after British Steel gave assurances on its long-term financial future
British Steel is on the brink of collapse as it appears unlikely to secure a government loan to keep it afloat putting nearly 25,000 jobs at risk.
The UK’s second largest steel producer is preparing for insolvency as last-ditch attempts to save the company did not appear hopeful yesterday.
If the talks fail it could mean 4,000 redundancies at the firm’s large plant in Scunthorpe and 20,000 others across the country, Sky News reports.
The company, its lenders and Whitehall officials have until Tuesday afternoon to agree a deal, at which point it could go into administration.
If British Steel’s government talks fail it could mean 4,000 redundancies at the firm’s large plant in Scunthorpe (pictured) and 20,000 others across the country
British Steel had asked for a £75million package of support to tackle ‘Brexit-related issues’ and has been holding talks with the Government.
Sources have told Sky the potential loan has been reduced to £30million, with today’s deadline fast approaching.
Shareholder Greybull had previously offered assurances on the company’s future, promising it did have enough to continue operating.
But unions were less convinced, with Unite national officer Tony Brady saying last week: ‘Unite has been in dialogue with the company to ensure wages continue to be paid and orders fulfilled, in addition to talking to Government ministers to ensure the future of British Steel is secured.
‘These are deeply unsettling times for our members and their families. Unite will continue to fight for the future of British Steel to ensure it continues to be a source of decent, well-paid jobs which sustains communities across the UK.
‘We urge the Government and Greybull to agree a package which guarantees the long-term future of British Steel as quickly as possible to safeguard jobs and confidence in the company.’
British Steel, Greybull and the Department for Business, Energy and Industrial Strategy are yet to comment.
In April, British Steel secured a £100million loan from the government to pay its EU carbon bill and avoid a hefty fine.
The bloc’s trading rules mean industrial polluters can pay for their previous year’s emissions using carbon credits. Companies can also trade their credits to raise cash.
The EU suspended UK businesses’ access to free carbon permits – alowing the emission of 1,000kg of CO2 – until the ratification of a Brexit deal.
The UK voted to leave the bloc in June 2016. It is now set to cease being a member on October 31 this year.
British Steel, its lenders and Whitehall officials have until Tuesday afternoon to agree a deal, at which point it could go into administration. File image used