British Steel seeks government loan for 'Brexit issues'

Darnell Taylor
May 18, 2019

British Steel is the country's second-largest producer, with 4,500 staff. A...

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

It is feared thousands of jobs could be lose at its plant in Scunthorpe should the contingency plans, reported by Sky News, be put into place. It now employs 4500 people directly and up to 20000 indirectly through its supply chain.

The company, which employs 4,500 staff mostly at its Scunthorpe steelworks, confirmed it had asked for more cash on top of a £120m loan negotiated with ministers last week to cover its bills for an European Union climate credits scheme.

British Steel has reportedly faced a slump in orders from European customers ‎due to uncertainty over the Brexit process.

However, a British Steel spokesperson said:"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".

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.

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A British Steel spokesman said discussions were continuing with ministers "about a package of additional support to assist the company address broader Brexit-related issues". The weakness of Sterling since the referendum has meant that the value of exports has also declined.

"Ministers need to support the wider steel industry with help on business rates and high energy costs, while securing a Brexit deal that secures a customs union and continued tariff-free frictionless trade".

"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. Minsters must come out and guarantee the loan required to safeguard British Steel.

"Thousands of United Kingdom jobs are on the line, not to mention the entire future of our proud steel industry".

It is still possible the funds to save British Steel will still be raised, sources have claimed.

Last week, the future of Britain's other major steel maker, Tata, was thrown into doubt after its planned merger with German rival Thyssenkrupp collapsed.

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