British Steel is on the brink of collapse unless the UK Government agrees to provide an emergency £30 million loan today, 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 its supply chain.
The firm has a registered office at MIdlothian Innovation Centre in Roslin but the former British Steel plants in Lanarkshire are now owned by Liberty House Group.
Greybull, which specialises in turning around distressed businesses, paid former owners Tata Steel a nominal £1 in 2016 for the loss-making company which they renamed British Steel .
Greybull had asked the Government for a £75 million loan but has since reduced its demand to £30 million, 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 in May to enable it to comply with the European Union's Emissions Trading System (ETS) rules.
