Government in last ditch Jingye talks ahead of British Steel sale deadline
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The government and its advisers are rushing to finalise the sale of British Steel to China’s Jingye ahead of a crunch deadline on Thursday.
Jingye agreed a provisional £50m deal in November to buy British Steel’s plants in the UK, the Netherlands and France and was given 70 working days to finalise the details.
The Official Receiver, which took control of British Steel when it collapsed last year, and advisers EY, were in talks with Jingye this weekend as they raced to meet Thursday’s deadline, The Sunday Telegraph reported.
The report cited sources who said they thought it was unlikely the deadline would be met.
Jingye wrote to the French government last week to push for its blessing for Jingye’s acquisition of British Steel’s factory in France, the Financial Times reported.
France has the power to veto the sale of the factory in Hayange in northern France because it supplies rail to French state railway company SNCF and is considered of strategic national importance.
If the deal fails, British Steel could be broken up and sold in separate pieces.
Jingye is working to buy a hotel in Scunthorpe to accommodate its executives working on the deal, The Sunday Telegraph reported.
Representatives of Jingye have visited the Bridge Hotel which is near British Steel’s works in the town.
Since it failed last May, British Steel has been run by the Official Receiver and is being propped up by taxpayers.
Jingye is reportedly planning on cutting 10 per cent of British Steel’s 4,000 UK workforce if it gets the deal through as a part of a cost-cutting drive.
Jingye and the Official Receiver were contacted for comment.