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British Steel Asks Govt For Cash Injection

The company who bought British Steel is reportedly asking the government for urgent financial support.

 

Jingye Group took charge of the manufacturer two years ago after British Steel became insolvent, but it now needs a cash injection to stay operational, Sky News revealed.

 

Though the amount of money it requires to keep its two blast furnaces functioning is unknown, it is thought the Chinese organisation could be asking for “hundreds of millions of pounds”.

 

Without this financial support, the 4,000 people who work at the Scunthorpe facility could be made redundant.

 

A spokesperson for the Department for Business, Energy and Industrial Strategy was reported as saying: “We recognise that businesses are feeling the impact of high global energy prices, particularly steel producers, which is why we have announced the Energy Bill Relief Scheme to bring down costs.”

 

This initiative was introduced last month for everyone on a non-domestic contract. It will provide a discount on gas and electricity prices to ease financial difficulties over the winter.

 

It was added: “This is in addition to extensive support we have provided to the steel sector as a whole to help with energy costs, worth more than £780m since 2013.”

 

Despite this, soaring prices is making it difficult for Jingye Group to continue operating the furnaces in Lincolnshire.

 

Without the funding, the group might import steel from China to distribute at British Steel’s sites instead.

 

A spokesperson from British Steel admitted: “We are facing a significant challenge because of the economic slowdown, surging inflation and exceptionally high energy and carbon prices.”

 

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