Jingye Group, the Chinese owner of British Steel, has sought a rescue package from the UK Government, as reported by Sky News.

The company has sought estimated support of around £400-£500m ($453-566m), according to the Financial Times.

The financial aid sought by the firm also includes around £100m to offset the increasing cost of carbon permits.

Jingye Group has said that it cannot operate two of its blast furnaces without government aid.

The UK’s steelmakers have been facing issues due to rising energy prices and inflation, as well as weakening demand due to an economic downturn.

Sources quoted by Sky News said that Jingye Group was prepared to lay off employees if it did not receive the financial support.

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The company bought the then-insolvent British Steel in 2020 and currently employs around 4,000 people, most of whom are part of its main operations at Scunthorpe.

The sources added that if the company does not receive the aid, it may resort to importing steel from China to British Steel’s UK sites.

They also noted that Jingye Group’s Scunthorpe blast furnaces would require ‘hundreds of millions of pounds’ to stay operational.

Representatives of British Steel have been in talks with UK Business Secretary Jacob Rees-Mogg ahead of the Conservative Party conference in Birmingham.

In a statement, the Department for Business, Energy and Industrial Strategy said it was ‘working at pace with the company to understand the best way forward as it seeks to secure a more sustainable future’.

It added: “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.”

Sources said it was unclear how soon ministers could be expected to make a decision on the matter.