It has been reported that Chinese firm Jingye Group is to buy UK steelmaker British Steel out of liquidation.
A Chinese industrial giant is favourite to be announced as the buyer of British Steel, after staff were reportedly told in an email that contracts are due to be exchanged.
In May, British Steel was placed into an insolvency process, putting 5,000 jobs in the UK at risk and endangering 20,000 in the supply chain.
The move followed a breakdown in rescue talks between the government and the company’s owner, Greybull. The Government’s Official Receiver took control of the company as part of the insolvency process.
Before this latest announcement, In August 2019, a Turkish army pension fund had announced that it planned to take over British Steel by the end of 2019.
A message sent to British Steel staff and seen by the Guardian indicates that the Official Receiver, a government employee managing the sale, “expects to shake hands on a sale to Jingye imminently”.
So the CCP pick up another company. When is the west going to learn. There is no such thing as a private company in China. All are either owned by the state or by law have to assist the state in anyway the state requires. It is a communist country. Stalin would feel right at home.
i have to agree,just another one to add to the power pot..i always said the reason China dumped cheap steel was a tactical move so they could buy other steel plants around the world,and this proves me right..
While I’m certainly not happy about a foreign company owning the last one indigenous producer of steel we have, realistically does it matter?
The workers remain British, the product remains British, the Chinese are not gaining any knowledge or technology they didn’t already possess, and it keeps the site open with no expense from the British taxpayer. In the event of conflict with China, it’s not like our own government couldn’t then just seize the site for national security reasons. This isn’t Huawei, we’re not giving them access to personal data or anything dangerous.
nothing stopping them making the steel inferior though especially if it is to be used in military equipment..i have used steel from China and it is to say the very least rubbish,you can cut it bend it very easy and rusts before you even get it in your own hands…lets hope British steel or should i say China steel does not end up like there homemade stuff…
If it’s being produced here, by British workers, I can’t imagine they’d be able to keep such blatant sabotage secret.
My personal opinion? This isn’t an attempt to sabotage us, it’s yet another move by China to make other countries more dependent on Chinese investment. They’re doing the same thing all over Africa, the Middle East, and SE Asia, swaying nations to take their side against the US on the international stage.
We’re already almost in that boat: post-Brexit we want to making trade deals with China to replace EU market share, but strategically we still need to oppose them.
we definitely need to oppose them,just look at ebay it,s all full of cheap copies,but it does not help when firms have gone there for Cheap labour thinking they are making money only for designs to be stolen and cannot do anything about it,as China does not recognise international law of any kind..and this so called rule of the EU about not trading with countries that have death penalty is stupid
Agreed.
It is already inferior steel! The workers in the plant would also be aware if they were being told to undermine the quality further, they are not stupid. Also much of the high quality special steel we require for warships is not produced in the UK, we made the decision decades ago to ditch that and produce commodity steel.
Think Sweden provided plate for supercarriers and China plumbing valves lol
My friend used to work in a steel stock holder, the money saved by buying cheap steel went in the skip as their was a lot of bent sheet that went in the skip. China buys a lot of scrap steel so quality varies!
Kind of how I see it Callum, I’d rather it was a UK based company but at the end of the day, its all in the UK so from a security aspect, it would be kind of hard for the Chinese (company or government) to ‘keep it’.
I’m not sure if these things have to be approved by the government/civil service but if not, who it gets sold on to next might be even more contentious potentially. Hey ho, the pros and cons of Capitalism.
Big mergers or purchases of companies are often subject to government review (possibly by trading standards, possibly by another entity) that establishes if the purchase is in the best interest of the market. For example, a merger of a couple of big supermarkets was blocked because they’d have an absolutely ridiculous market share that would mean they could inflate prices with no consequence.
Most likely, the government will look at the purchase and happily sign off because it secures tens of thousands of jobs.
Callum wrote:“The workers remain British, the product remains British, the Chinese are not gaining any knowledge or technology” Actually it does. The West still produces better quality steel than the Chinese, but the main advantage it gives the Chinese is a foothold into other industries linked to steel, primarily defence. (weapons, armour, but specifically jet engines) Lets not forget that the Chinese already have a foothold into our telecommunication. The military defence intranet is run on BT lines. Guess whom BT have a deal with to run their telecoms…China. The problem we have is a load of back stabbing MPs… Read more »
True, although I don’t think BS actually produces a lot of the higher military grade steels. If I recall correctly, a big fuss kicked off a year or two when it was revealed a lot of Swedish steel was being used for the T26s because we didn’t produce the right grades domestically.
Most of the hull steel will be AH36E grade which you can get anywhere, the production for RN vessels is controlled by Lloyds Register and believe me, nothing gets past them. everything is tested at the mill and then tested again when its being cut and rolled, all independently. the more specialist steels and stainless steels are normally from Germany, Italy or Sweden, its not that we can’t make it, just the demand in the UK market isn’t there to warrant doing it. The Chinese are not going to learn anything from buying a steel mill here. admittedly some of… Read more »
What he said ??
Wonder if the workers will have to sleep in sheds with mattress on the floor like in China? Seems we are still building the Chinese war machine for its eventual take over of the world !
A very grave error. Why does this government allow this?
In all of Britain, is there not ONE Venture Capitalist with (for them pocket change) 70 million pounds to purchase this company? Not one? The Chinese want it, for them there is value there – less the company but to gain a toehold in Britain and to seek concessions in other areas by threatening those jobs when things don’t go their way. Look at the stupid, insane money being thrown at and lost on ventures such as WeWork and Uber. British Steel could be transformed into a specialty steel company producing the kinds of steel that Britain has to go… Read more »
This type of investment would be the domain of private equity, not of venture capital. They’re two entirely different business models. And frankly, the fundamentals look pretty bad for steel: global oversupply, mainly due to China, which subsidises its steel production in a way not allowed in the west. Margins on hot rolled coil actually went negative in 2018. Any investment fund putting money into a steel plant would almost certainly lose that money.
Purchase price isn’t the issue, the site needs significant investment to be competitive,. The Chinese are talking about 1 billion pound investment. The UK has always been open to foreign investment, in fact it’s one of the strongest aspects of our country globally. It’s very easy to do business here. There is a general panic everytime China buys a company, but from a UK PLC view this is a great deal. There is no tech here they don’t already have so there is zero national security concerns. In fact just the opposite, we should end up with a state of… Read more »
Maybe a Boris govt can start supporting the UK’s defence industrial base, although the terms of included in the Politictical Declaration are not encouraging. The govt has prioritised unit cost price and applied EU rules while ignoring the wider benefits to the UK economy and defence capability of investing in the UK. The first 100 of Ajax’s ,a 1990’s Spanish / Austrian design will be entirely built by General Dynamics at the American company’s Spanish plant, using Swedish steel. The remaining 489, nope not built in S. Wales, all the hulls will still be still fabricated in Spain, still with… Read more »
You are surely aware that we do not produce specialist steel in this country? Sweden produces the steel we need for the armoured vehicles so that is what we use. They are also a key ally of ours so we can trust them. If you want subs built with 100% British steel then you need to open a steel plant that produces the special steel needed… No one else has because of the cost of doing so and the fact that we lost the foothold in that industry in many decades ago. This is nothing to do with EU rules,… Read more »
Incorrect. Yes the subs need specialist steel which France produces. But the Type 26’s, Ajax and certainly the MAN army vehicles, require low spec plate. Your arguement misses the point completely. UK govt policies have resulted in the destruction of much of our manfacturing base. It is obfuscation to argue that there is no UK supplier. That is the whole point. Germany, France, Italy, Sweden, Spain, The Netherlands ALL ignored EU Procurement Rules to protect their own industries. Blair refused to award the contract for the 8000 trucks which met all NATO standards to the LDV consortium to be built… Read more »
Ajax is the emperors new clothes and CTA40 the new SA80 MK1
Blair sold us out, he wanted to be E.U. president for his twisted ego!
British industry has long needed cheap, long term finance. Banks just want a quick punt shorting shares or betting on exchange rates. Hedge funds/private equity just wants to asset strip.
If I was Chancellor, I would get NS&I to launch “Industry Bonds”. Let individuals buy a minimum of £100, a maximum of £30,000. No Income or Capital Gains Tax, like Premium Bonds. Give investors 2% interest, lend to UK Industry at 4%.
A nice idea in principle but many details would need to be worked out. I don’t think such a scheme could be modelled on other NS&I investments such as Premium Bonds (which are now maximum individual holding of £50,000 by the way) or Income Bonds. Firstly, the investor needs to be prepared for capital loss if HMG gets too many loan defaults. Secondly, once lent the funds become relatively illiquid unless HMG is willing to behave like the biggest b@*#ard banks and call in loans with little notice thus putting businesses into serious difficulties (which would seem to defeat the… Read more »
Most people hold Premium Bonds for long periods (decades), so day to day volatility is not there. As long as they are not spooked into a run & the Gov/NS&I backing should stop that fear.
Investments would be mainly in “blue chips” BAE, Rolls Royce, UK arm of Airbus, etc. So total loss risk would be minimal.
As you are using private savings, it gets around “no state aid to industry” WTO rules.
I’ve never designed a financial product but I would think it’s very dodgy to simply assume that the redemption patterns would be the same as they are for Premium Bonds when the underlying nature of the investment is so different. Also, is it the “blue chips” that really need such support? They can borrow easily enough elsewhere, until they get into trouble which is exactly when significant losses can arise. I know it tends to be a dirty word around here (and for the record I most definitely am not a supporter of the party) but I think Labour might… Read more »
HM Treasury is already on the hook for any losses from Student loans & help to buy, so extending that to “Industry Bonds” would not be much further. Given the potential improvement to the real economy, I think it is worth it. Rolls Royce + 8 others are working on production line small modular reactors. Target price is 1.8 billion each. They think the UK needs 16. Instead of foreign money to build these, I would use industry bonds. Re Labour. A watered down version of Corbyn’s policies I could vote for. Sadly, the full fat version he is proposing… Read more »
Yeah. Fair point on other liabilities. I would certainly like to see it happen one way or another. I also agree on Labour. I’m not anti all their policies but concerned that Corbyn is driven more by unthinking dogma rather than selected well thought out strategies. Put it all together and it becomes a recipe for disaster.
Another sad day for British industry.
I’ve been made redundant a couple of times myself, so I don’t say lightly that it is madness to allow the Chinese to take over our steel industry. It’s a no-brainer. Shall we give Russia, Iran, Syria & North Korea control over vital UK industries?
Shame on our own great investors & HMG that they let this happen. Where is the joined up thinking, patrionism & common decency for the workforce & country? The PRC has one reason for this “aid”- Leverage.
Another mad decision. The Chinese Government is buying this plant to use later in some form of leverage over the UK. Sophos and Cobham next to US Hedge Funds. I have been involved with the Chinese for 20 years now, and in every instance they have practiced duplicitous behaviour.
What… Like the Americans?
No, nothing like the Americans, who are addicted to money and acquiring wealth in business deals. The Chinese have embedded themselves deeply in to the UK and USA economy by immigration and taking control of thousand of business entities, but for different reasons. The Chinese government has its controlling tentacles everywhere, and from my experience are omni present in the background of every Chinese overseas enterprise. We have already underestimated their intentions and continue to do so.
Incredible. China turning the screws on Western government’s infrastructure, from Australian farms and mines to British steel and telecommunications. We are weak and they are getting an ever tighter grip on us – we pay them hand over fist for the pleasure while their police shoot British nationals in the street in HK. Disgrace.
I despise our Politicians who would sell us off to the enemy for a paltry £70m. Bastards.
It is no £70m There needs to be Billions poured into the plants in order to make them competitive. Plus this is not a particularly strategic asset as it does not produce the sort of steel that we need for special purposes. The government could always take control of it if need be in the future.
And yet they can always magic the money to keep the big wig pals in the banking sector in business … how much was that again?
And now they let an “enemy” nation take control of British Steel.
We should be keeping china as far away from our industry as possible.
Found this very useful stuff for me and i hope for others as well. The Jingye Group is reported to have become the leading contender to buy British Steel out of liquidation. A Chinese industrial giant is poised to rescue British Steel within days, buying out its embattled Scunthorpe plant and potentially saving 4,000 jobs.
Bad, bad idea.
Bad, bad idea
This is a bad idea.
Bad idea.