British government and Jingye Group continue dispute over British Steel – BBC

The parties' estimates of the Scunthorpe plant differ significantly

UK Secretary of State for Business and Trade Jonathan Reynolds is preparing to join negotiations with the Chinese owners of British Steel. Jingye Group expects a substantial payment for the Scunthorpe steel plant, BBC reports.

In April of this year, the British Parliament passed an emergency bill at an emergency meeting to give the government control over British Steel and prevent the closure of the last blast furnaces in the country. In March, Jingye Group rejected a £500 million government bailout package.

Jingye remains the official owner of British Steel after the government refused to fully nationalize the loss-making company, which ministers say is worth virtually zero. Negotiations between officials are ongoing, with Reynolds likely to join them in September.

A senior source in the Ministry of Business and Trade does not rule out concessions to the Chinese firm. However, as the insider noted, the parties’ valuations of British Steel are still very different.

The spokesman said that the government has taken swift action to ensure the continued operation of blast furnaces and is working with Jingye to determine the best long-term sustainable future for the Scunthorpe plant.

In April, Reynolds said that full nationalization of British Steel would be a likely next step. However, ministers had hoped that Jingye would transfer ownership of the company for a nominal fee. This development was called into question during negotiations between the parties in early summer, when the Chinese owner told government officials that British Steel was still worth hundreds of millions.

However, the British government does not see state ownership as a long-term solution. Officials have repeatedly stated their intention to find another commercial partner for British Steel. But the search has reached a dead end after Jingye demanded a large payment, and the situation will not move forward as long as the issue remains unresolved.

BBC sources have different opinions on the Chinese company’s willingness to make concessions and agree to a more realistic valuation of the asset. The broadcaster has contacted Jingye for comment.

As GMK Center reported earlier, as of early May this year, according to Jonathan Reynolds, the UK government has already allocated almost £100 million for British Steel. He also confirmed that a £2.5 billion steel fund would support the ongoing operations of the Scunthorpe steel mill.