LONDON: British Steel, the country's second largest steel producer, is on the brink of collapse unless the government agrees to provide an emergency 30 million pound ($38.1 million) loan by later on Tuesday, a source close to the situation said.
The steelmaker, owned by investment firm Greybull Capital, employs around 5,000 people, mostly in Scunthorpe, in the north of England, while tens of thousands more depend on in its supply chain.
Greybull, which specialises in turning around distressed businesses, paid former owners Tata Steel a nominal one pound in 2016 for the loss-making company which they renamed British Steel.
Greybull had asked the British government for a 75 million pound loan but has since reduced its demand to 30 million pounds, according to the source close to the negotiations.
If the loan is not approved by Tuesday afternoon, administrators could be appointed for British Steel as early as Wednesday, the source said.
Britain's Business Ministry declined to comment.
British Steel secured a government loan of around 120 million pounds ($154 million) in May to enable it to comply with the European Union's Emissions Trading System (ETS) rules.
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