British Steel on brink of collapse unless it gets £30m Government loan - sources

Steel producer British Steel is on the brink of collapse unless the Government agrees to provide an emergency £30m loan, according to two sources.

British Steel plant in Scunthorpee. Picture: Scott Merrylees

Owned by investment firm Greybull Capital, British Steel employs around 5,000 people, mostly in Scunthorpe, in Yorkshire, while 20,000 more depend on its supply chain.

Greybull, which specialises in trying to turn around distressed businesses, paid former owners Tata Steel a nominal £1 in 2016 for the loss-making company which they renamed British Steel.

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British Steel had asked the government for a £75m loan but has since reduced its demand to £30m after Greybull agreed to put up more money, according one of the sources, who is close to the negotiations.

Greybull was also the owner of Monarch, an airline that went bust here in October 2017.

If the British Steel loan is not approved, administrators EY could be appointed as early as today, the source said.

Greybull declined to comment.

More than 150,000 UK steel jobs have been lost since the 1980s, according to a new study.

In 1981 the industry employed 186,000 workers but the total has now slumped to around 32,000, said the GMB union.

The report was published ahead of more talks aimed at securing the future of British Steel amid continued speculation that the company could go into administration.

The GMB said Yorkshire has suffered the most job losses - 40,000 -followed by the West Midlands with 25,800.

GMB national officer Ross Murdoch said: “The decline of the UK’s steel industry is devastating to see.

“Consecutive UK governments have failed to protect our proud steel heritage, and now Theresa May is overseeing its demise.

“Ministers must be prepared to make use of all the options - including nationalisation - in order to save British Steel and the wider steel industry.

“We need a genuine commitment to manufacturing in the UK which focuses on investment in infrastructure and improvements to technology and training.

“It’s time the Government took their hands out of their pockets and stood up for steel.”