Coronavirus: British Steel’s Chinese owner seeks £100m state loan | Business News

Must read

Untethered bi-pedal robot runs 5km and other tech news

BBC Click’s Jen Copestake looks at some of the best technology news stories of the week including:Twitter begins testing a new online shopping featureUS...

Zoom settles US class action privacy lawsuit for $86m

The video conferencing firm denies wrongdoing, but has agreed to boost security measures. Credit: Source link

Vaccine passport: Almost 300 fraudulent claims rejected

The Department of Health says the system is now "stable and running well". Credit: Source link

Watch Olympics Rugby 7s Live Streaming Finals

Check out the finals of Rugby 7s live stream at Summer Olympics 2021. Canada vs Australia and USA vs South Africa in the Semifinal...
This is an online news portal that aims to share latest news about these topics "news, business, health, sports, technology " and much more stuff like that. Feel free to get in touch with us!

The new Chinese owner of British Steel is seeking another £100m of taxpayer support less than three months after completing its takeover of the insolvent Scunthorpe-based group.

Sky News has learnt that Jingye Group, which bought the steelmaker in March, has asked the government for a commercial loan as the industry struggles to find a way through the coronavirus pandemic.

The request from British Steel is understood to be under consideration in Whitehall.

Jingye Group bought the Scunthorpe steelmaker in March

It is the latest such appeal from a sector placed under extreme strain by the pandemic, with aggregate requests for support now understood to be approaching £1bn.

Sky News revealed last month that Tata Steel, owner of the Port Talbot steelworks in Wales, was seeking a £500m commercial loan.

Liberty Steel is said to have asked for roughly £250m, while Celsa, a Spanish-owned group, has requested a much smaller sum said to be in the low tens of millions of pounds.

The Scunthorpe-based group collapsed into compulsory liquidation almost exactly a year ago, putting roughly 4000 jobs at risk at the company and many thousands more in its supply chain.

Following months of talks with bidders from Turkey and China, the Official Receiver struck a deal with Jingye.

A taxpayer indemnity covering the costs of running British Steel during the intervening nine months is understood to have cost in the region of £800m.

Jingye’s effort to secure new government support for the UK’s second-largest steelmaker could come in the form of a direct loan.

Alternatively, changes to one of the Treasury’s emergency lending programmes – the Coronavirus Large Business Interruption Loan Scheme (CLBILS) – could provide an alternative solution.

The Financial Times reported this week that ministers were preparing to increase the maximum loan available under the scheme from £50m to £200m.

Steel industry sources cautioned, however, that such an amendment might not help Jingye, because its lack of a trading history in the UK would make it harder for a commercial bank to lend to the company using CLBILS.

The Scunthorpe steel plant
British Steel collapsed into insolvency last May

British Steel was previously a subsidiary of the Indian conglomerate Tata, which remains the owner of the Port Talbot site.

The Scunthorpe-based group has flirted with insolvency on previous occasions as the economics of steel production in the UK have become less attractive – and further complicated by the uncertainty over future trading relationships with the EU.

British Steel collapsed into insolvency last May after the government decided against providing £30m to the company under its then-owner, Greybull Capital.

That came just weeks after ministers did agree to provide an emergency £120m loan to cover the cost of an EU carbon credits scheme for industrial polluters.

A British Steel spokesman said: “Like many businesses we’ve been in contact with the UK government throughout the pandemic.

“We’ve robust measures in place to protect our people and our business and are grateful for the ongoing support of our employees, owners, customers, suppliers and government.”

A request for aid from UK taxpayers from a Chinese-owned company could be controversial given escalating geopolitical tensions over the provenance of the COVID-19 crisis.

The proximity of the plea from British Steel to Jingye’s takeover completing might also be contentious, although people close to the situation pointed out that the Chinese negotiations about the deal had been underway for months before the new strain of coronavirus emerged.

British Steel works sign is seen in Scunthorpe
British Steel is based in Scunthorpe

British Steel’s turnaround plan has been derailed by the pandemic, with hundreds of its employees initially furloughed under the government’s wage subsidy scheme.

Many of them returned to the company’s Skinningrove plant late last month.

The fate of British Steel became intertwined with the Conservative Party’s pledge to “level up” the UK economy in the run-up to December’s general election.

Following the completion of Jingye’s takeover, hundreds of workers were made redundant, although 3,200 jobs were saved by the new owners.

The Chinese group’s chief executive, Li Huiming, said at the time: “It has not been an easy journey since we first announced our intentions in November but the longer I have spent in Scunthorpe, the more I have come to believe in the successful future of these steelworks and the employees that have made them famous throughout the world.”

Together, we can forge a new partnership that will mark the beginning of a new illustrious chapter in the history of British steelmaking.”

:: Listen to the Daily podcast on Apple Podcasts, Google Podcasts, Spotify, Spreaker

Jingye, which is headquartered in the country’s industrial heartland of Hebei province, also operates in the chemicals, hospitality and real estate sectors.

The company employs more than 22,000 people and exports its steel products to dozens of countries.

The Department for Business, Energy and Industrial Strategy was contacted for comment.

Credit: Source link

- Advertisement -

More articles


Please enter your comment!
Please enter your name here

- Advertisement -

Latest article

Government makes NHS Covid app less sensitive following ‘pingdemic’ concerns

The government has moved to make the NHS Covid app less sensitive following concerns that it has been telling too many people to self-isolate.In...

Covid: NHS app in England and Wales tweaked to notify fewer contacts

The app in England and Wales will now only alert contacts from the previous two days in asymptomatic cases. Credit: Source link

West Midlands Police officer convicted of assaults

The police watchdog says there is no evidence to support complaints the attacks were racially driven. Credit: Source link

Get £200 Worth of Apps and Entertainment with New Samsung TVs

If you’re looking to buy a new TV this year, then Samsung has an offer which might just tempt you to pick one of...