British Steel on the edge of collapse
By Sean Farrell
Date: Tuesday 21 May 2019
(Sharecast News) - British Steel is facing administration unless it can secure an emergency government loan, putting thousands of jobs at risk.
The UK's second-biggest steel producer is preparing to appoint administrators on Wednesday unless a rescue deal is agreed on Tuesday afternoon, Sky News reported.
If the company collapses, more than 4,000 jobs could go at its steelworks in Scunthorpe, Lincolnshire. Up to 20,000 more jobs in the company's supply chain would also be threatened.
British Steel has been in talks with its banks and the government to agree a deal after a fall in orders from European customers caused by Brexit uncertainty. The company has also been affected by the weak pound and the trade war between the US and China.
It cut its request for emergency government support to about £30m from £75m after its shareholder, Greybull Capital, and banks agreed to supply new funds, Sky said. The banks have also released their security to allow a government loan on secured terms.
A deal could yet be struck but talks with Greg Clark, the business secretary, have failed to make progress, making insolvency more likely. The company's collapse would intensify controversy about the Brexit impasse's effect on business and raise questions about the government's financial decisions regarding British Steel.
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