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British Steel, one of the largest steel producers in the UK, is on the brink of collapse as it awaits news on an emergency government loan that its bosses appealed for last week.

If the government loan fails to materialise then British Steel could fall into administration and head out of business in a matter of hours.

According to Sky News, insolvency is now the expected outcome for the company, although hope has not yet been entirely lost that a deal on an emergency loan might still happen.

However, any loan agreement would need to be reached urgently and at some point on May 21st, with reports suggesting that the business will need to call in administrators on Wednesday May 22nd if a rescue deal hasn’t been done by then.

There are very serious concerns about what the financial crisis affecting British Steel will mean for its near 5,000-strong workforce, and for roughly 20,000 other people who work within its supply chain.

A collapse into administration could see large-scale redundancies at the company’s main operating bases, including at its enormous steelworks in Scunthorpe, North Lincolnshire, where thousands of people are currently employed.

“Administration would be devastating for the thousands of workers and their families who rely on this key industry,”

Shadow minister for steel Gill Furniss MP has described the steel industry as being critical to the UK’s manufacturing base and insisted that the government “must intervene” to help British Steel stay in business.

“Administration would be devastating for the thousands of workers and their families who rely on this key industry,” she said in a statement.

The government has already provided British Steel with significant financial support in recent weeks, including via the provision of a £120 million loan to cover a bill from the EU in relation to its carbon dioxide emissions.

Recent reports suggest that the company needs a further government loan worth around £30 million in order to avoid insolvency.

The figure of £30 million is down significantly from the £75 million loan British Steel asked for from the government last week, with the company’s shareholders and lenders having found ways to inject new money into the business in recent days.

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