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France threatens to block Chinese firm’s rescue of British Steel

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Via Yahoo Finance

Hopes that British Steel will be saved by Chinese industrial firm Jingye have suffered a blow after the French government said it could intervene to stop the deal.

The French finance minister, Bruno Le Maire, reportedly told the UK chancellor, Sajid Javid, that ministers are opposed to the takeover, throwing into doubt seven months of work to save the company and its Scunthorpe steelworks.

The trade row has blown up a matter of hours before the UK’s official departure from the EU, which takes effect at 11pm on Friday.

President Macron’s government has a say in the sale of British Steel because the company has a sizeable French operation that is considered a strategic national asset as it makes track for the country’s vast rail network.

If France were to veto the sale, it could force Jingye and the British government to rip up and redraw plans that ministers hoped would be finalised by the end of February.

Cengiz Holdings, the Turkish firm revealed by the Guardian to be the government’s fall-back buyer if the Jingye deal collapses, responded to concern about French opposition immediately.

“Cengiz Holding enjoys a strong trading relationship with French industries such as energy, mining and aviation,” said the chief executive, Omer Mafa.

Jingye has agreed to pay £50m for British Steel and has said it is prepared to invest £1.2bn in the Scunthorpe factory over the course of a decade.

Trade unions have refused to support proposals for up to 500 job cuts but gave their approval to the remainder of Jingye’s proposals last week, a move that appeared to make a deal far more likely.

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The fresh obstacle, first reported by Sky News, comes shortly after the government insisted the sale was on track.

Differing French and British stances on the sale of the UK’s second largest steelmaker, which employs more than 4,000 people, come against the backdrop of the UK’s imminent exit from the European Union.

A spokesperson for the department for business, energy and industrial strategy was unable to explain what the government could do to salvage the agreement with Jingye in the face of opposition from France.

“Like any sale of this nature, there are a number of regulatory steps that need to be taken over the coming weeks before the sale can complete,” the spokesperson said.

“The deal with Jingye is very much on track and we expect the transaction will complete in the coming weeks.”

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