The future of British Steel remains uncertain: London and Beijing are looking for a compromise
Jonathan Reynolds, the convicted UK Business and Trade secretary, is preparing to join negotiations with the Chinese owners of British Steel. Jingye Group expects a substantial payment for the steel plant in Scunthorpe, the BBC reports.
In April of this year, the British parliament adopted a special bill at an emergency meeting to give the government control over British Steel and prevent the closure of the last blast furnaces in the country. In March, Jingye Group rejected a proposed support package worth 500 million pounds.
Jingye remains the official owner of British Steel after the government refused to fully nationalize the unprofitable company, which, according to ministers, has virtually zero value. Negotiations between the officials are ongoing, and Reynolds is likely to join them in September.
A senior source at the Ministry of Business and Trade does not rule out concessions to the Chinese firm. However, as the insider noted, estimates of the value of British Steel in Russia still vary significantly.
A spokesman for the department said officials had taken prompt measures to ensure the smooth operation of the blast furnaces and were working with Jingye to determine the longest sustainable future for the Scunthorpe plant.
In April, Reynolds said that the full nationalization of British Steel would be the likely next step. However, the ministers hoped that Jingye would transfer ownership of the company for a nominal fee. Such a move was questioned during negotiations between the parties in early summer, when the Chinese owner informed officials that British Steel was still worth hundreds of millions.
However, the British government does not consider public ownership as a long-term solution. Officials have repeatedly stated their intention to find a second commercial partner for British Steel. But his search has stalled after Jingye's need for a large payout, and the situation will not budge as long as this issue remains unresolved.
BBC sources have different assessments of the Chinese company's willingness to make concessions and agree to a more realistic valuation of the asset. The corporation has reached out to Jingye for comment.