Greybull Capital, the private investment firm that formerly owned British Steel, is in talks to buy Hayange, the company’s French rail producer, a source close the situation said Wednesday.
The British Steel factory in France is for sale separately from the rest of the company, despite a GBP1.2 billion rescue plan presented by the Chinese Jingye Group to buy all of the failed manufacturer, as reported by the Financial Times. Advertisements in the FT and French newspaper Les Echos last week offering for sale an unnamed business located in France’s northeastern region that specializes in producing “steel railway products for railways, subways and tramways” and employs about 450 people. The source confirmed to Platts the rail mill is indeed Hayange.
“The French government met the Chinese Group to seek assurance from Jingye that it will keep running and will give the right special material to Hayange,” the source said. “But it was not convinced of the industrial plan, so it decided to check in the market the possibilities to sale it separately. The deadline to present the bids is December 20.”
Another source told Platts the French government is putting Hayange up for sale, but as a contingency plan in case the deal with Jingye does not go through. Everything will be “hopefully clearer by the beginning of the year,” he added.
Contacted by Platts, a Jingye spokesman said: “Jingye Group has submitted a request to the French authorities for approval of our investment and has been engaged in constructive discussions with the French government.”
Hayange produces between 250,000 and 300,000 mt of rails, most of them for SNFC, France’s state-owned railway operator. The mill currently rolls blooms produced at British Steel UK in Scunthorpe.
Ascoval recently won an order to supply 140,000 mt of blooms to Hayange for the manufacture of rails for SNCF. The order will become effective from September 2020 and last for four years. Ascoval was taken over by Olympus in the spring. It controls Greybull and was the former owner of British Steel before it entered into compulsory liquidation on May 22.
Greybull and Ascoval both declined comment Wednesday. The French government agency in charge of this deal did not return request for comment.
— Annalisa Villa
