Chinese steel mill Jingye is currently seeking the regulatory approvals it needs to complete the purchase of British Steel and is in active contact with EU regulators to gain these, the Official Receiver told S&P Global Platts Monday.
“There is no hard deadline to complete this process. The Official Receiver continues to be able to call upon the indemnity provided by the government to keep the business trading and supplying its customers”, the Official Receiver’s office said.
Although UK is set to leave the EU on January 31, the merger requires approval from a number of European regulators, both at the national level in some countries and by the EU.
“The steel industry is a highly regulated industry and it was always expected that the approvals process would take time to complete. This process remains on track in line with expectations of all parties,” the Official Receiver’s office said.
The Chinese mill planned to close the deal by the end of the first quarter. In November, Jingye agreed a deal in principle to buy the Scunthorpe-based steelmaker for GBP50 million ($64 million) and to invest as much as GBP1.2 billion into the company. The terms of the sale contract gave until the end of February to for the deal to conclude but allowed for an extension into March.
British Steel, which went into compulsory liquidation on May 22, 2019, has about 3 million mt a year of production capacity in the UK, France and the Netherlands, including the supply chain there are at stake 20,000 jobs.
A Jingye spokesman declined to comment.
— Annalisa Villa
