Turkish investor eying British Steel should £50m sale collapse
Cengiz ready if bid from Chinese business Jingye fails
A Turkish investor is waiting in the wings to step in and salvage British Steel, should the latest suitor, the Chinese multi-industrial iron and steel business Jingye, pull out.
Turkish conglomerate Cengiz Holding has confirmed it is ready to swoop if current negotiations over a £50m (€59m, $65m) sale collapse, reports the Daily Telegraph.
Jingye has said it will invest £1.2bn in British Steel as part of its rescue plan for the business. It also intends to cut 500 jobs as part of its turnaround strategy but, as it has just negotiated new employment contracts for British Steel staff with unions, that’s one major obstacle to a successful conclusion removed.
Aside from regulatory approvals, Jingye has also to win over the French government. It has to agree on ownership by a company based in China as British Steel’s plant in Hayange in northern France is a major supplier of rails to the country’s train network and is therefore seen as of strategic importance.
Despite these potential hurdles, the company said it “continues to make progress in securing all other necessary approvals for the transaction” and aims to complete a sale in the first quarter of this year.
Should the bid fall, though, Cengiz will pounce. “British Steel is an important asset and we are watching developments closely. [We] are ready to make a bid for the whole of British Steel,” said Cengiz CEO Omer Mafa. Cengiz would not look to make a profit for 14 years, instead reinvesting trading surpluses.
British Steel was declared insolvent in May. The Official Receiver, which took control of it while a buyer was sought, said: “We are focused on Jingye concluding its purchase.”
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