The owner of Liberty Steel has asked the government for £170m in financial support.
In a letter sent to the Department of Business last night, Sanjeev Gupta said the support was required to pay day-to-day operating expenses and absorb recent losses.
Concerns over the future of Liberty Steel have grown after key financial backer, Greensill Capital, went bust.
Liberty Steel employs about 5,000 people in the UK.
“The collapse of Greensill has put financial pressure on the GFG Alliance and our British steel operations,” Mr Gupta writes in the letter.
“We are still refining the details with my management team and our external advisors, but preliminary indications are that the steel manufacturing and processing operations would need in the range of £170m to fund working capital and some additional capital to fund operating losses in the short term, which we are in the process of finalising.”
Sanjeev Gupta’s GFG Alliance employs a total of 5,000 people in the UK – 3,000 of them in steel and aluminium businesses across 12 UK sites.
There have been grave concerns for the future of Liberty Steel since its main financial backer Greensill Capital went bust in early March.