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Union leaders dismiss Thursday ‘Jingye deadline’ suggestion for British Steel buy-out

Union leaders have dismissed the idea that negotiations to complete a sale of British Steel are approaching a “cliff edge” as talks continue between the Government and potential new owner the Jingye Group.

And the Official Receiver, who has been in control of the company since it went into liquidation in May, has confirmed that selling to the Chinese company is still viewed as the “best deal”.

It comes after national reports suggested that the a 70 working day deadline would expire on Thursday following Jingye’s agreement to enter a deal in principle. The £70 million agreement was struck in November.

However, Scunthorpe works multi-union committee chairman Paul McBean said it was not the case that a deadline is approaching this week.

He looks over the headquarters site, with further steelmaking in the North East. He said: “We are continuing to talk with the Government as negotiations progress.

“Business Secretary Alok Sharma visited the Scunthorpe site as soon as he was able to last week after being appointed.

Business Secretary Alok Sharma, left, and Scunthorpe MP Holly Mumby-Croft, pictured with an employee during a visit to the British Steel works in Scunthorpe.
(Image: Scunthorpe Live)

“He spoke with the management team and unions to show the Government is still committed and will be taking over the regular update calls that Business Secretaries Greg Clark and Andrea Leadsom have previously managed.

“There is no 70-day deadline coming up. There is no end or cliff edge to the negotiations approaching. This deal is a massive undertaking so it is natural for it to take time.

“No new contracts have been sent out to staff yet to the best of my knowledge but hopefully it shouldn’t be too much longer.”

British Steel was placed in compulsory insolvency back in May last year when debts of £880 million were revealed at a High Court hearing. Greybull, who took over the site in June 2016, was removed from day-to-day control.

The autumn saw Jingye emerge as the likely successor, when a period of exclusive due diligence failed to result in an offer from the Turkish state military pension fund-backed Ataer Holdings. Agreement was reached in November.

Jingye Group chairman Li Ganpo, second right, with – from left – Baroness Redfern, Andrew Percy, then MP Nic Dakin and North Lincolnshire Council leader Rob Waltham, at British Steel, when an agreement was reached.
(Image: Nic Dakin / Twitter)

A spokesman for the Insolvency Service said: “The Official Receiver and Jingye are continuing to work to conclude the sale of British Steel as quickly as possible.

“The Official Receiver considers that the Jingye offer is the best deal for creditors.”

Potential objections by the French government to the prospective Chinese takeover are believed to be one of the main sticking points, with Jingye working through the official channels.

It is considered a French national asset, meaning the country’s government’s approval is required.

British Steel flag and Union Jack. Anna Gowthorpe/PA Wire
British Steel flag and Union Jack. Anna Gowthorpe/PA Wire
(Image: PA)

The British Steel plant in Hayange, which supplies France’s rail network, is believed to be one of the most profitable parts of the business. Its exclusion from any sale may undermine Jingye’s commitment.

But Mr McBean said: “I have spoken with unions at the French site and they aren’t posing any opposition to the deal. It is down to the French government to agree.”

Around 500 of the 4,000 jobs look set to go once the deal is over the line, with unions having agreed a package for new terms.

Another deal dependent on Jingye’s buy-out is Barrett Steel’s swoop for metal distribution centres currently operated by British Steel, in Scunthorpe, Gateshead, Wolverhampton and Dartford.

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