British Steel seeks new £75m taxpayer loan to avert collapse

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British Steel seeks new £75m taxpayer loan to avert collapse

Postby dutchman » Tue May 14, 2019 10:00 pm

The government is drawing up contingency plans for the collapse of the UK’s second-biggest steel producer, Sky News learns

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Ministers are drawing up secret contingency plans for the collapse of British Steel amid a fresh funding crisis that could trigger thousands of job losses at its plant in Scunthorpe and intensify fears about the entire industry's future.

Sky News has learnt that ‎insolvency experts have been placed on standby in case the UK's second-largest steel producer cannot secure tens of millions of pounds to see it through the coming months.

The contingency plans are being drawn up as the company seeks a further loan of up to £75m from the government.

A financial support loan on commercial terms was agreed in outline with Whitehall as part of a broader package announced earlier this month, insiders claimed on Tuesday.

However, the second part of the deal was supposed to have been finalised by the end of last week, with the delay leading some existing lenders to question whether to continue backing British Steel, according to sources.

One said that part of the company could fall into administration as soon as Wednesday.

The potentially calamitous outlook for one of the UK's most prominent manufacturers has emerged just two weeks after it was handed £120m of taxpayer support by the Business Secretary, Greg Clark, to meet a payment deadline from Brussels.

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