British Steel says seeks more govt financial support

British Steel

"We have a fantastic workforce here in Scunthorpe producing some of the best steel in the world; 4,000 high skilled jobs are at stake here".

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

Nic Dakin, Labour MP for Scunthorpe where British Steel's main plant operates, told City A.M. the firm's problems have been "created by the mess the government is making of the Brexit process". It now employs 4500 people directly and up to 20000 indirectly through its supply chain.

The news comes a fortnight after British Steel secured a £100 million emergency government loan to ensure that it avoided a steep fine from Brussels and paid an European Union carbon bill on time.

The Department of Business, Energy and Industrial Strategy said it could not comment on speculation about its role in any rescue talks.

Keen to stress that it's not just British Steel in dire need, but other companies too, the steelmaker, which employs around 4,500 directly and another 20,000 indirectly, has stated that "uncertainties around Brexit are posing challenges for all businesses including British Steel".

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.

British Steel is said to be having "constructive discussions" with it's stakeholders on how to proceed and a range of support measures addressing "broader Brexit issues".

Uncertainty over Brexit has led to a slump in orders from Europe and it has also been affected by United States tariffs on steel imports.

It has also been struggling with the prolonged weakness of sterling since the European Union referendum in June 2016 and the escalating trade US-China trade war.

"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.

Union officials are now urging the Government to guarantee the future of British Steel and safeguard thousands of jobs.

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

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



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