British Steel could lapse into administration within days if an emergency government loan fails to materialise, according to reports.
Sky News reports that British Steel – the second largest steel producer in Britain – is preparing for insolvency on Wednesday, with suggestions that it is becoming increasingly unlikely that funding will come through to safeguard the roughly 25,000 jobs across the company.
Consultants EY are expected to be formally appointed as administrators within 48 hours, Sky reports, if a deadline of Tuesday afternoon for a deal is not struck.
While British Steel was reportedly asking the government for £75m in assistance, this has now been reduced to £30m.
Falling into administration would be another blow for the company’s workers, less than a week after a statement from British Steel suggested that it had sufficient funding to continue business as usual.
There are particular concerns over the firm’s Scunthorpe site, which is home to some 4,000 employees.
Further plant closures, or cuts to pension entitlements to sure up British Steel’s finances, could run the risk of more workers looking towards defined benefit transfers, as was the case in the company’s Port Talbot works.
Tata Steel, which owns the Port Talbot steelworks, was in talks with Germany’s Thyssenkrupp, but these were abandoned two weeks ago.