UP to 25,000 jobs are at risk as British Steel amid fears the company won’t be handed an emergency loan by the government, it was reported last night.
The UK’s second-largest steel producer is on the brink of collapse, with the firm, its lenders and Whitehall all preparing for an insolvency to take place within 48 hours, sources told Sky News.
It’s said administrators will be formally appointed on Wednesday unless a deal is struck by Tuesday afternoon.
If last-minute talks fail to secure a solvent deal, British Steel’s collapse could result in more than 4,000 redundancies at its giant Scunthorpe steelworks, job cuts at
its other sites, and as many as 20,000 more jobs in its supply chain also jeopardised by the crisis.
The alleged threat of insolvency comes just days after a statement by British Steel appeared to suggest that it had sufficient financial support to survive for the foreseeable future.
Last Thursday, the company said that it had the backing of shareholders and lenders with operations continuing as normal, with a spokesman saying: “As the business navigates the significant uncertainties caused by Brexit, and explores options to strengthen the business for the long term.
“We are pleased to confirm that we have the required liquidity while we work towards a permanent solution.
“We are grateful for the support that our stakeholders and the British government have provided to date.”
However, talks with Business Secretary Greg Clark and his officials are said to have stalled the last few days, with a series of missed deadlines, reportedly leading British Steel’s directors to determine that an insolvency process is all but unavoidable.