British Steel is on verge of administration - putting 25,000 jobs at risk
The UK’s second-biggest steel maker is on the verge of administration as it continues to ask for more government money to help stay afloat.
The company had been trying to secure £75m in financial support to help it to address “Brexit-related issues”, reported the BBC.
What has happened to British Steel?
The company asked for emergency financial support from the government last week, only a fortnight after it had been provided with a £120m loan to cover a bill from the EU for its carbon dioxide emissions.
The company has since dropped the amount it is looking for from £75m to around £30m, with the shareholder Greybull Capital and other lenders also agreeing to put new investment into the manufacturer.
The firm’s biggest plant is in Scunthorpe, with another major site in Teeside, but the company has links to many smaller businesses across the country which could also be affected.
Around 4,500 jobs could be at a direct risk if the company enters administration, with another 20,000 in jeopardy along the supply chain.
Unless a deal is reached, the firm could go into administration within the next 48 hours. The final resort would be insolvency and the loss of jobs if it cannot be sold off in full or in parts.
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Nationalisation is an option
According to the BBC, nationalisation or a management buyout are being discussed as potential options for British Steel if it can not reach a deal with the government.
The company has blamed its recent problems on Brexit, saying a drop in orders from European customers stems from the current political uncertainty.
The weakness of the pound following the Brexit vote has also hurt British Steel, as has the trade war between the US and China.
British Steel’s plant in Scunthorpe was sold to Greybull Capital for £1 in 2016, following the worst of the steel crisis, and saving 4,000 jobs.
The Department for Business, Energy and Industrial Strategy said, "As the business department, we are in regular conversation with a wide range of companies."
This article originally appeared on our sister site, The Scotsman.