Give us a hand: British Steel says seeks more govt financial support

Give us a hand: British Steel says seeks more govt financial support

Britain's second-largest steel manufacturer is looking to Whitehall for a second emergency loan in a matter of weeks.

It follows reports the company needs a loan of up to £75m to keep trading in the coming months.

A collapse of British Steel would spark the loss of up to 5,000 jobs at the group's sprawling steelworks in Scunthorpe, northern England. The company employs around 4,500 people and a further 20,000 through its supply chain.

'Last month the company agreed a short term bridge facility with Government to help it meet its European Union emissions obligations, and discussions are continuing about a package of additional support to assist the company address broader Brexit-related issues, whilst continuing with its investment plans'.

A British Steel spokesperson said: "As we have previously commented, the uncertainties around Brexit are posing challenges for all businesses including British Steel, and we are holding constructive discussions with our stakeholders on how to navigate them".

Lenders to British Steel, which include the PNC and ABN Amro banks, are understood to be concerned that orders will remain stagnant until Brexit uncertainty is cleared up, meaning a cash injection is required to support the firm in the meantime.

"Discussions are continuing about a package of additional support to assist the company address broader Brexit-related issues", they said. The weakness of Sterling since the referendum has meant that the value of exports has also declined.

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"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.

"I am calling on the government to take the necessary action to support our steel industry at this critical time".

"Thousands of United Kingdom jobs are on the line, not to mention the entire future of our proud steel industry", said Ross Murdoch, national officer of the GMB union.

The company is owned by private investment firm Greybull Capital after being purchased from the Indian giant Tata Steel in 2016.

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.

"British Steel is a sound business providing high skilled jobs", he said.

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