According to the BBC, the British government should contribute to the rescue through loan guarantees and other financial support, to save the 5,000 or so jobs of the steelmaker.
The steelmaker in bankruptcy British Steel was bought by the Chinese group Jingye, announced the public body in charge of the bankruptcy of the British steelmaker, Insolvency Service. "A sales contract was made with Jingye Steel (…) to acquire the activities and assets of British Steel Limited (BSL), including steel mills in Scunthorpe (North England), UK smelters, shares of FN Steel BV (a subsidiary in the Netherlands) and British Steel France Rail " the Hayange plant in Moselle, according to the Insolvency Service press release.
The amount of the buyout has not been disclosed, but according to the BBC and Reuters, it would be 70 million pounds (81.2 million euros) and the UK government should contribute to the rescue through guarantees loans and other financial support. 10 Downing Street wants to protect 5,000 steelworker jobs, largely in the giant Scunthorpe complex in northeastern England.
According to Financial Times, Jingye plans to increase production to more than 3 million tons per year, up from 2.5 million previously, and improve equipment to make them more energy efficient. According to the British daily, the Chinese group said that for British Steel to become profitable again, "Lower costs", which could augur for job cuts.
Bankruptcy in may
British Steel, number two in the UK behind Tata Steel, was forced into bankruptcy in May for lack of sufficient liquidity and after failed talks with the government on a fresh injection of new money. He had put his financial difficulties on behalf of Brexit, whose uncertainties plague steel demand of its European customers.
Jingye produces iron and steel but has also invested in real estate and tourism. According to its website, the private group has assets valued at 39 billion yuan (5.05 billion euros) and has 23,500 employees.
The search for a savior for British Steel has been going on for months and has been the subject of twists: a project of recovery by the pension fund of the Turkish army Oyak did not materialize at the end of a exclusivity period a few days ago.
European steelmakers have recently pointed to Chinese competition to explain their difficulties, in addition to the global economic slowdown, uncertainties related to the Sino-US trade dispute and Brexit. In May, the European Steel Association (Eurofer) called on the European Union to come to the rescue of the sector, explaining that the European market was being invaded by cheap Chinese steel as a result of the imposition punitive tariffs last year by the United States.
The European Union's share of global steel production fell in 2008, from around 15% to less than 10% between 2008 and 2018, while China produces more than half of world steel , according to the global industry association (WSA).
" Alarm signal "
In the United Kingdom, the reaction to the prospect of seeing British Steel go under the Chinese flag was mixed.
Andrew Adonis, Labor and former Minister of Transport, blasted on Twitter the "China destroys British Steel by flooding the cheap steel market" and "Buy the remains now" of the steel giant "For peasants".
Other opposition party, the Liberal Democratic Party (anti-Brexit) felt on the same social network than "The acquisition of British Steel by a foreign company should serve as a warning signal for Britain's place in the global economy". He mocks the statements of the ruling Conservative party on a "Globalized Britain" thanks to Brexit.
On the union side, one of Britain's Unite leaders, Steve Turner, welcomed the announcement of an impending agreement and "The end of anxiety for thousands of workers, their families and communities", while recalling that there was "A series of false starts" in the rescue of British Steel.
On the French side, where British Steel owns a plant in Hayange, Moselle, Grégory Zabot, representing CFDT, said the employees " did not see (the) industrial project (from Jingye) nor his investment plan ».
