Chinese Firm Jingye To Buy Troubled British Steel

As many as 4,000 jobs at British Steel’s Scunthorpe and Teesside plants could be cased saved by the rescue package for the iconic steel making company being offered by China’s Jingye Group. The struggling steelmaker and its assets has been offered to be bought by Jingye at a yet undisclosed amount.

After British Steel was forced into liquidation since May this year, the government via the Official Receiver had kept the company running.

The news “was a positive step forward,” said Business Minister Andrea Leadsom.

While saying that it was good news that the sale and purchase agreement had been signed between eth two companies, Leadsom said that the deal was yet to be completely finalized.

“Completion of the contract is conditional on a number of matters, including gaining the necessary regulatory approvals. The parties are working together to conclude a sale as soon as reasonably practicable,” said a statement from the Official Receiver.

“The business will continue to trade as normal during the period between exchange and completion. Support from employees, suppliers and customers since the liquidation has been a critical factor in achieving this outcome,” the statement said.

The steelworks at Scunthorpe, UK steel mills and shares of FN Steel BV, British Steel France Rail SAS and TSP Engineering will be acquired by Jingye. The shares owned by BSL in Redcar Bulk Terminal are also to be included in the sale deal.

“It has been a big concern, nobody knew what was happening… whether they had a job, could pay the mortgages, feed the families. It is great news,” one worker at British Steel in Scunthorpe told the BBC.

The purchasing of British Steel was a “significant asset to our country”, said Gareth Stace, director general of industry lobby group UK Steel, told the media, because the total output of steel by the company accounts for about a third of total steel production in the UK and most of that comes from the Scunthorpe factory of the company.

The Scunthorpe production unit needs “very significant investment” curtently, he said and that is the reason that Stace the decision of the purchase as announced by Jingye was “really welcome”.

“Jingye are looking to make significant investment, are in for the longer term and therefore it isn’t about keeping this site going for a year or two or a couple of years. To me, what I understand about the company, it’s about looking to the future, so we’re not going to be back in here in three years, five years, in 10 years’ time,” he said.

Earlier, negotiations for a rescue deal for the company were being held with Ataer, a subsidiary of Turkey’s state military retirement scheme Oyak.

“Ataer Holding… completed the due diligence processes for British Steel and the negotiations did not reveal a success mainly due to lack of support from the key stakeholders of the company and that the expected commercial efficiency could not be achieved,” they said in a statement.

(Adapted from BBC.com)



Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability, Uncategorized

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