Rival Turkish bid being lined up for British Steel - report
The government is lining up a rival bidder for British Steel in case an agreed takeover by China’s Jingye falls through, it was reported on Wednesday.
Jingye, a Chinese conglomerate chaired by former Communist party official Li Ganpo, announced a £50m rescue package for the stricken steel producer last autumn. However, the deal - which would safeguard around 4,000 jobs - has yet to complete.
It was reported earlier this week that Jingye had brought in consultancy firms PwC and McKinsey to help close the complex deal over the next few weeks. Jingye has preferred bidder status, meaning it alone has the right to negotiate with the official receiver.
But the Department for Business, Energy and Industrial Strategy (BEIS) is understood to have been discussing a back-up deal with Cengiz Holdings, a Turkish conglomerate, should the takeover fail to progress, The Guardian reported.
Istanbul-based Cengiz is understood to have close ties to the Turkish authorities and is involved in a number of infrastructure deals in the country, including plans for a new airport and high-speed rail project.
BEIS would not comment on whether it had held discussions with Cingez specifically. But a spokesperson told the BBC: "Officials have met, and continue to meet, all parties interested in acquiring British Steel, as the government is not party to the exclusivity agreement signed by the bidder and the official receiver.
"The government believes the Jingye transaction will compete in the coming weeks."
British Streel collapsed in May after the government refused to provide emergency funding, and is understood to be losing around £1m a day.
Jingye stepped in with its takeover offer after an initial bid from Ataer Holdings, part of the Turkish military pension fund, collapsed. But the deal has faced numerous issues, including multi-jurisdictional regulatory approval and tense negotiations with suppliers.
Trade unions have also been vocal about their concerns about the prospect of job cuts. Jingye has promised to invest £1.2bn in British steel, to ramp up production and to cut costs.