Chinese steelmaker Jingye plots fresh bid for British Steel

A Chinese steelmaking group has approached ministers with a renewed attempt to buy British Steel amid talks over a rescue led by Turkey’s military pension fund.

Sky News has learnt that Jingye, which is based in Hebei province in northern China, has contacted the UK government in the past fortnight to express fresh interest in a takeover of the UK’s second-biggest steel producer.

The Official Receiver, which has been managing the liquidation of British Steel since it collapsed in May, signed an exclusivity agreement with Turkey’s Ataer Holding in mid-August as a stepping stone towards finalising a deal.

Insiders said at the time that that period would last for about eight weeks, giving Ataer until the middle of this month to conclude negotiations with the government.

Sources said on Wednesday that while the Official Receiver could not engage in discussions with rival bidders during the exclusivity period, the Department for Business, Energy and Industrial Strategy (BEIS) was not prohibited from holding talks with other potential buyers of British Steel.

It was unclear whether Ataer’s due diligence had uncovered new obstacles to a takeover, although Jingye’s renewed interest in a deal could strengthen ministers’ hand in the ongoing negotiations.

The Turkish fund has offered a headline price of between £60m and £70m to take control of British Steel.

The fate of more than 4,000 British Steel workers, and of up to 20,000 additional jobs in its supply chain, rest on securing the company’s future, and that of its plants in Scunthorpe and northeast England.

Andrea Leadsom, the business secretary, has held several sets of talks with union and company bosses and Ataer, which is a subsidiary of Oyak, the Turkish armed forces pension fund.

A spokesperson for BEIS said: “In August, the Official Receiver confirmed a period of exclusivity with Ataer Holdings to purchase the entire business and assets of British Steel and work is continuing to finalise the details.

“The government continues to meet with a wide range of businesses as a matter of course.”

A rescue of British Steel would be viewed as an important sign of the government’s commitment to steel manufacturing in the UK, which has slumped over recent decades.

The company, which was previously a subsidiary of the Indian conglomerate Tata, has flirted with insolvency on previous occasions as the economics of steel production in the UK have become less attractive.

Sky News revealed in August that Ataer had drawn up a business plan involving around £900m of investment in British Steel facilities over a period of several years.

The government has also agreed an outline support package totalling hundreds of millions of pounds in the form of grants, indemnities and loans on commercial terms.

Loss-making British Steel fell into insolvency in May after the government decided against providing £30m to the company under its then-owner, Greybull Capital.

That came just weeks after Greg Clark, Ms Leadsom’s predecessor, agreed to provide an emergency £120m loan to cover the cost of an EU carbon credits scheme for industrial polluters.

Jingye did participate in the earlier phase of the British Steel sale process but was reported by the Financial Times in July to have withdrawn its interest.

The Chinese group, which is headquartered in the country’s industrial heartland, also operates in the chemicals, hospitality and real estate sectors.

According to its website, Jingye employs more than 22,000 people and exports its steel products to dozens of countries.

Jingye could not be reached for comment.

(c) Sky News 2019: Chinese steelmaker Jingye plots fresh bid for British Steel