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Teesside jobs at risk as British Steel to enter official receivership

The future of British Steel looks increasingly uncertain Credit: PA Images

British Steel is expected to be placed into an insolvency process later on Wednesday, jeopardising hundreds of jobs on Teesside.

The Press Association (PA) and Sky News reported the news on Wednesday morning.

PA tweeted that the firm is to go into "official receivership" after failing to secure the funds it says were necessary for its future.

Meanwhile Sky News was reporting that administrators for the business services firm EY were in court finalising their appointment.

British Steel employs 700 people in the region.

The government said on Wednesday that it had worked "tirelessly" with all parties to try and find a solution.

It cited its stance on providing any kind of financial assistance as being restricted by legal issues.

The government can only act within the law, which requires any financial support to a steel company to be on a commercial basis. I have been advised that it would be unlawful to provide a guarantee or loan on the terms of any proposals that the company or any other party has made.

This will be a deeply worrying time for the thousands of dedicated British Steel workers, those in the supply chain and local communities.

In the days and weeks ahead, I will be working with the Official Receiver and a British Steel support group of management, trade unions, companies in the supply chain and local communities, to pursue remorselessly every possible step to secure the future of the valuable operations in sites at Scunthorpe, Skinningrove and on Teesside.

– Greg Clark, Business Secretary

The government also said it had provided a £120million bridging loan to help British Steel meet its emissions trading compliance costs.

News of its financial issues came to light in recent weeks, with the company requesting a £75m loan in order to continue trading.

Now, however, the firm appears to be on the brink of administration.

The Tees Valley Mayor, Ben Houchen, issued a statement on Wednesday morning strongly criticising Greybull Capital, the venture capital firm that owns British Steel.

He said he's attempted to convene an urgent meeting to save the sites and jobs at Lackenby and Skinningrove.

Yet again the people of Teesside have been shafted by heartless private investors, and a government completely unwilling to pull their finger out to help local workers.

This issue is much bigger than party politics and so I have to every MP and Council Leader in our region to convene an urgent meeting this Friday. As a region, our one and only priority will be to ensure Teesside jobs are protected and the company's profitable plants at Lackerby and Skinningrove remain open.

– Tees Valley Mayor Ben Houchen

British Steel moved on Tuesday to quell speculation that employees would not receive their May salaries.

A worker who spoke to ITV Tyne Tees on Tuesday said they simply wanted an opportunity to keep going.

We just want some help off the government. We're doing all we can in here, we always will and we always have done.

We're just asking for a bit of help, we just want a chance.

– Paul Trowsdale, Community Union

In a statement issued on Tuesday, British Steel said it was working to ensure its "future success".

The British Steel Group has faced various trading challenges recently. In response to this, we have been working closely with our stakeholders to consider the different funding options available to the Group.

“These negotiations have not concluded and we continue to work with all parties to achieve an outcome that secures the future success of British Steel."

Updates will follow throughout the day...