Published: Sat, May 18, 2019
Economy | By

British Steel seeks further £75m loan from government to avert collapse

British Steel seeks further £75m loan from government to avert collapse

British Steel is meanwhile the second biggest operator of the metal in the United Kingdom after Tata, while unions on Tuesday said the latest developments required government action.

The company is looking for £75 million to enable it to keep trading, according to a report by the BBC.

GMB national officer, Ross Murdoch, said it was time for action and the Government, which, he said, was known to sit on its hands "while United Kingdom manufacturing collapses round its ears" must take action and guarantee the loan needed to safeguard British Steel.

The private equity-owned firm employs around 5,000 people at its Scunthorpe steelworks and various other sites, and supports about 20,000 more jobs indirectly in its supply chain.

Gill Furniss, the shadow business minister, said: "The government's continued failure to support this vital industry is to blame".

The appeal for extra cash comes just weeks after the government loaned British Steel £120m to cover payments under European Union rules for carbon dioxide emissions.

British Steel has reportedly faced a slump in orders from European customers ‎due to uncertainty over the Brexit process.

British Steel revealed it is in discussions with its stakeholders on how to navigate its current situation.

According to Sky News, British Steel is seeking a further £75m loan from the government, with insolvency experts placed on standby in case further funds can not be secured.

"Discussions are continuing about a package of additional support to assist the company address broader Brexit-related issues", they said.

KPMG, the big four accountancy firm, is understood to have advising the Government on British Steel.

"This government has a track record of sitting on its hands while United Kingdom manufacturing collapse round its ears", said Ross Murdoch, GMB national officer.

It is still possible the funds to save British Steel will still be raised, sources have claimed.

Sky News, which first revealed the funding request, reported that insolvency experts had been lined up in case it fails to drum up enough capital to stay afloat.

"Now is the time to take action".

The news comes amid uncertainty over the future of Tata Steel's main European operations based in the United Kingdom after German industrial conglomerate Thyssenkrupp last week scrapped merger plans with the Indian giant.

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