China’s Jingye Group in talks to buy British Steel for $90m

Photo: Reuters

China’s Jingye Group is in talks to buy British Steel, it said on Monday, in a deal estimated to be worth 70 million pounds ($90 million) that could protect thousands of British jobs.

Any agreement would be of major political significance in Britain as it prepares to elect a new government on Dec. 12. The lack of opportunities in northern England, where British Steel is based, is an election issue, as the social gap between north and south widens.

A deal is not yet finalised, Jingye told Reuters following a BBC report of an imminent 70 million pound ($90 million) agreement.

A spokeswoman for Hebei-based Jingye Group, a private company, said she was unclear about the value and whether further details would be announced this week.

Gareth Stace, director general of industry lobby group UK Steel, also told Reuters nothing had been finalised.

“I would be surprised if it did not get finalised,” he said. “But it’s not a done deal.”

No-one from British Steel was immediately available for comment.

The company was put into compulsory liquidation on May 22 after Greybull Capital, which bought the firm for one pound from Tata Steel three years ago, failed to secure funding to continue its operations.

Its closure would impact 5,000 jobs in Scunthorpe and a further 20,000 jobs in the supply chain.

EMBRACE CHINA

Turkey’s military pension fund OYAK said in August it had reached a provisional agreement to take over British Steel but that deal has not been finalised.

Henri Murison, director of the Northern Powerhouse Partnership, set up to boost the economy in the north of England, said a rescue deal would be “very welcome news”.

He said it was time to embrace cooperation with China, which is extending its international reach through its Belt and Road global development strategy. Chinese companies have also bought a steel plant in Serbia and its sole copper mine.

Chinese ownership is contentious, especially in the steel industry. The European Union, which does not include Serbia, has sought to protect its own steel industry from competition from cheap Chinese imports.

Britain has said it will leave the economic and political bloc, but has yet to agree a departure deal.

An advantage of Jingye, a multi-industry business specialised in iron and steel, is that it knows the industry and has the ability to invest, industry sources say.

With 23,500 employees and registered capital of 39 billion yuan ($5.58 billion), Jingye Group ranks 217th among the top 500 enterprises in China.

Reuters

Singapore Reporter/s

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.