Jingye Group’s purchase of British Steel could be finalized in a matter of days, after the Chinese conglomerate delivered employment contract offers via e-mail to UK-based employees it intends to retain, according to a local media outlet.
Jingye has offered 3,200-3,300 employees new contracts and placed 400 employee on gardening leave until March 9. Earlier, the Chinese buyer had hinted a 10pc reduction of British Steel’s workforce. At the same time, Jingye plans to sell several British Steel distribution centres, including one in Scunthorpe, to stockholder Barrett Steel with employees at those sites set to receive separate communication.
British government officials had indicated that they expected the sale of British Steel would be completed by the end of February when a £1mn-per-day indemnity from the UK Treasury was scheduled to expire. However, France’s sluggish decision-making on the approval of British Steel’s sale of the country’s highly profitable, rail-making Hayange plant coupled with travel restrictions on Jingye’s China-based senior executives have added further delays to the deal. France’s finance minister Bruno Le Maire is expected to make an announcement this week as to whether the government will permit the transfer of what is seen as a strategic national asset over to Chinese ownership.
Nevertheless, British mainstream media outlet The Guardian reported that the UK Treasury’s indemnity was recently extended beyond the end of February deadline as the parties thrash out the remainder of the deal with Jingye and the French government.
British Steel, formerly owned by Greybull Capital, produced 2.8mn mt of steel in 2018. The company entered administration in May 2019. British Steel has an annual steelmaking capacity of 4.5mn mt; producing construction steel, rail, wire rod, and special profiles.