Chinese steel maker Jingye ‘makes fresh approach’ to buy British Steel
Chinese steel maker Jingye has reportedly approached the government with a fresh offer for British Steel, despite officials having picked out another company as their preferred bidder weeks ago.
Sky News reports the firm, which is based in Hebei province in northern China, made its approach to take over the UK’s second-biggest steel producer in the last two weeks.
Read more: Questions linger as Turkish military pension fund swoops in on British Steel
In mid-August, the Official Receiver picked Turkish fund Ataer Holdings as its preferred bidder after British Steel fell into administration in May this year, giving the green light to enter exclusive final negotiations.
However, it is likely that the emergence of fresh interest in British Steel will strengthen the government’s hand in those talks.
A source with knowledge of the negotiations said although they are still on track to strike a deal eventually, talks were going “certainly slower than expected”.
That has been cause for “frustration” on the side of the Insolvency Service, they added, with Ataer yet to submit a final plan. “It’s useful for [the government] for Ataer to see that there are other options out there.”
An Insolvency Service spokesperson declined to comment on the status of negotiations.
Morning Wire understands the exclusivity arrangement with Ataer lasts until at least the end of October. During that time, the Official Receiver can not engage in discussions with other potential buyers – however, the Department for Business, Energy and Industrial Strategy (Beis) can still hold further talks.
A Beis spokesperson 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.”
Jingye’s approach is not completely out of the blue. It had originally expressed an interest in taking over British Steel after the government launched its search for a buyer over the summer. It was then reported by the Financial Times in July to have withdrawn from the running.
Nic Dakin, Labour MP for Scunthorpe – where the firm employs 5,000 people at a plant almost as big as the town centre itself – told Morning Wire the fresh bid was “a bit left field”.
“I’d be surprised if something that has come in at this stage can leapfrog Ataer’s bid. Things have gone a bit quiet [since the Ataer announcement], which is probably a good thing.”
Read more: British Steel’s collapse under former owner Greybull turns up the heat on Whitehall
But, he added: “It’s very positive that people continue to express interest in taking British Steel forward. It’s pretty clear that it’s a business people would like to buy.”
Founded in 1988, Jingye employs 22,000 people and turned over 90.1bn yuan (£10.3bn) last year.