Chinese conglomerate Jingye Group has agreed in principle to complete the acquisition of British Steel from the appointed UK Official Receiver on March 9, according to a statement published on the company’s website on March 3.

 

The acquisition is subject to the acceptance of employment offers sent to 3,200 employees based at British Steel’s Scunthorpe steelworks, Teesside Beam Mill, Skinningrove Steelworks, FN Steel (Alblasserdam, Netherlands) and TSP Engineering. Former Redcar steelworks owners, Sahaviriya Steel Industrial (SSI), exercised their pre-emption rights over a 50pc stake in the Redcar Bulk Terminal (RBT) owned by British Steel following this announcement and as such the transaction will not include British Steel’s share of the RBT.

 

Jinyge’s proposal for the acquisition of the assets of British Steel France Rail (Hayange) will not be part of the transaction, outlined the statement. The French government had not made a judgment on Jingye’s offer. French finance minister Bruno Le Maire on Wednesday told local media, “Hayange manufactures the SNCF’s rails, so it’s a strategic activity…so I want to find another buyer since British Steel will be taken over without Hayange.”

 

While not naming the interested parties Le Mair indicated that four bidders had expressed interest in purchasing British Steel’s strategic French asset, with rumours highlighting ArcelorMittal (Luxembourg), Saarstahl (Germany), Olympus Steel (USA) and Liberty (UK) as suitors.

 

British Steel, formerly owned by Greybull Capital, produced 2.8mn mt of steel in 2018 and has an annual steelmaking capacity of 4.5mn mt; producing construction steel, rail, wire rod, and special profiles. The company entered administration in May 2019. British Steel’s Hayange plant has an annual capacity to produce 370,000mt of 100 different rail profiles in more than 30 steel grades from 6metres up to 108metres. Hayange has a five-year agreement to supply SNCF Network with 120,000mt rails per year until 2021.

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