The UK government took control of British Steel after parliament was called for a rare Saturday session on April 12 to discuss a bill on the steel industry in an attempt to keep the blast furnaces in Scunthorpe running, Kallanish reports.
The Steel Industry (Special Measures) Bill, which was approved by both houses of Parliament and became law after receiving royal assent, is not yet a full-scale nationalization, as ownership of the assets has not been transferred.
Jonathan Reynolds, secretary of state for Business and Trade, said on Saturday there would be controversy that the government had negotiated in good faith with Jingye's British parent steel company. He made a "generous" offer, "which included reasonable conditions based on common sense to protect the workforce, taxpayers' money and create a commercially viable company for the future," he said. "Despite the fact that our offer to Jingye was substantial, it required much more – frankly, an excessive amount."
This offer was probably an improvement over the 500 million pounds ($654 million) that was supposed to have been offered by the government at the end of March, but which Jingye rejected.
"Nevertheless, we were still committed to negotiations, but over the past few days it became clear that Jingye's intention was to abandon the procurement of sufficient raw materials to keep the blast furnaces running. In fact, his intention was to cancel existing orders and refuse to pay for them. Thus, the company would irrevocably and unilaterally cease primary steel production at British Steel," Reynolds added.
He also stressed that the government has offered to purchase raw materials to continue the work of BFs. However, "Jinye made a counterproposal instead: that we are transferring hundreds of millions of pounds so that his money, and possibly other assets, can be immediately transferred to China, without any conditions to prevent it," Reynolds noted.
"Jinye also refused on condition that the blast furnace be kept in good working order," he added.
Meanwhile, Reynolds said, as if there had been no transfer of ownership, the government would pay a fair market value for the assets, but "in this case, the market value is practically zero."
He also noted that "Jin's intention is to keep downstream Mills, and supply from China, not from Scunthorpe."
"The transfer of ownership to the state remains on the table. Maybe at this stage, given the behavior
