Chinese steel producer Jingye Group, owner of British Steel, the UK’s second largest steelmaker, is now eyeing Liberty Steel’s UK plants, UK media reported May 19.
According to The Telegraph and Financial Times, Jingye Group has told the UK government that it would be interested in parts of Liberty, if the company fails to refinance its UK steel plants.
Liberty Steel, part of metals and energy group GFG Alliance, owned by magnate Sanjeev Gupta and his family, is in trouble after its biggest financier Greensill Capital collapsed in March, and is seeking fresh capital. On May 5 the company said that it will “fix or sell underperforming units” in a restructuring and refinancing drive as it recovers from the collapse of Greensill Capital.
Liberty Steel has grown rapidly in recent years, including via acquisition of troubled assets, to become Europe’s fourth largest steelmaker with a 6 million mt crude steel capacity in the region.
Liberty Steel UK is the third largest steelmaker in the country — with nine sites across England, Scotland and Wales — producing both flat and long products.
Jingye completed the acquisition of British Steel in March last year, pledging to invest GBP1.2 billion ($1.69 billion) in the 3 million mt/year UK steel producer which had entered compulsory liquidation in May 2019. The sale was made by the Official Receiver. China-based market sources told S&P Global Platts at the time that the main motive behind Jingye’s purchase was that China had banned net steel capacity expansion in the domestic market, in a move to curb pollution, obliging the steelmaker to look overseas for its expansion.
It is thought possible that Jingye could be interested in further expansion in the UK.
Although the UK government has said that it wants to support the UK steel industry, UK media also reports that the government is thought unlikely to currently be in a position to support a specific company.
Liberty Steel declined to comment when contacted by Platts May 19, while Jingye was not reachable.
— Annalisa Villa
