The UK’s second-largest steel producer British Steel is nearing insolvency. The company is on the verge of collapse with nearly 25,000 jobs at stake, according to Sky News. However, it can be revived if the government agrees to provide an emergency financing of £30 million.
The union officials’ demand to the government for an emergency financial support was slashed from £75 million to £30 million. Also, the company’s major shareholders Greybull Capital and lenders are willing to provide extra funding.
According to the media report, British Steel, its lenders and Whitehall are preparing for an insolvency to occur within 48 hours, unless a solvent deal is secured by Tuesday afternoon. EY will be formally appointed as administrators on Wednesday.
However, the circumstances have changed. More than 4,000 employees at the company will become redundant. That said, nearly 20,000 jobs in its supply chain could be affected, according to reports.
Last Thursday the company said that it was firmly backed by shareholders and lenders. That means the operations will continue as normal. The company said, “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.”
A spokesman for the Community union said, “We would urge all parties to recognise the consequences of not taking the necessary steps to ensure British Steel can continue.
“Everyone needs to do absolutely everything to give the company the chance of a future as to do otherwise would be devastating for thousands of workers and their families.”