The Chinese buyers of British Steel have reportedly been left “furious” as it emerged that the failed steelmaker’s French factory is for sale separately from the rest of the company.
Last month China’s Jingye struck a deal to buy the whole of the collapsed manufacturer, with the firm to pay about £50m to take over the business, saving 4,000 jobs in the process.
The conditional deal included all of British Steel’s assets, covering subsidiaries such as the Hayange mill in northern France, which produces rail for train lines.
However, the Financial Times this morning reported that a new process is underway to find a buyer for the factory, which is a strategic industrial asset for the French government, meaning it can grant or withhold approval for any change of ownership.
Earlier this month French officials asked for confirmation from the Chinese firm that it would continue to supply metal to Hayange.
Last week adverts in the Financial Times and French financial daily Les Echos were spotted offering the sale of an unnamed steel rail production business of about 450 people in northern France.
Sources confirmed to the Financial Times that the site in question was indeed the Hayange plant.
The new sale process has been undertaken as contingency planning in case the Jingye deal fell through.
Officials from the Chinese firm visited the French finance ministry earlier this week, and were reportedly “furious.”
Jingye said in a statement: “Jingye Group has submitted a request to the French authorities for approval of our investment and has been engaged in constructive discussions with the French government.”
Efforts to complete Jingye’s deal are still underway. Business secretary Andrea Leadsom yesterday said the sides were working “flat out” to get the deal over the line:
“Obviously British Steel is a vital part of the Scunthorpe area’s working life. Generations have worked at the steel plant there and it currently employs 4,000 people directly and up to 20,000 in the supply chain, so I am really keen to see this deal go through.
“We are working closely with Jingye to make sure we can get it completed, and I remain very optimistic.”