China’s Jingye working to close British Steel buy in Q1: company

The Chinese company Jingye is continuing to work toward closing its deal to purchase British Steel and is fully committed to close it by Q1, a spokesman for the company told to S&P Global Platts Wednesday. He also confirmed that Jingye has entered discussions with Barrett Steel, the largest steel stockholder in the UK, in order to sell four British Steel distribution centers to them, immediately upon the sale of British Steel to Jingye, pending the completion of the deal.

In an official statement, Barrett Steel said it is currently waiting for the sale of British Steel to be finalized. Barrett is hoping to secure British Steel Metal Centre sites including: Wolverhampton, Dartford, Newcastle and Scunthorpe, alongside offices in Cheadle and Edinburgh, according to the statement.

According to French unions, Jingye’s representatives are also trying to convince France’s government to back them and not block the sale of the British steel French unit, Hayange, in an effort to close the deal.

The spokesman for Jingye confirmed that company representatives visited the French mill and have pledged to invest Eur60 million over five years in Hayange. Among the investments being considered are a new line for finishing rails and an increase in the mill’s output capacity. Production would be increased from 330,000 mt to 500,000 mt of rail. Jingye pledged a total investment for all British steel of GBP1.2 bln, as previously reported.

As reported, the French government’s approval is also required for the sale of British Steel’s Hayange plant. Sources close to the deal said that although the French government would never act against the UK government, they have put Hayange up for sale separately as a contingency plan in case the deal with Jingye does not go through.

A source close to the deal said Wednesday that three bidders have submitted their proposal for Hayange, among them there are special steel producer Ascoval and Liberty Steel. Both companies when approached by Platts did not comment. The steelmaker Ascoval recently won a bid in order to supply 140,000 mt of blooms for the manufacture of rails for SNCF at the BSFR rolling mill plant in Hayange in northern France.