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China Jingye Eyes up Liberty

https://en.steelhome.com [SteelHome] 2021-05-25 11:45:01

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Chunks of embattled industrial entrepreneur Sanjeev Gupta’s Liberty Steel could be bought by Jingye, the Chinese conglomerate that acquired British Steel out of liquidation.

Jingye has told the Government it would be interested in parts of Liberty, which has about 3,000 steelmaking staff in the UK, should Mr Gupta’s GFG empire fail to secure new funding.

Government sources confirmed to The Telegraph that Jingye has told them it would consider taking on parts of Liberty. They are most likely the speciality steels business that produces critical parts for aerospace industry customers such as Rolls-Royce and is regarded as a strategic business for the UK.  

GFG - the parent group of Mr Gupta’s sprawling businesses which include Liberty - is fighting for its life after losing its main source of funding the its main source funding with the collapse of Greensill Capital in March.

Greensill went into administration because of concerns about its concentration of lending to GFG, with a Credit Suisse fund pulling backing for GFG and the lender struggling to get credit insurance.

Mr Gupta is desperately seeking fresh funding to keep his businesses running. Liberty, Britain’s third-largest steel maker, has been forced to halt or slow production because of cashflow contraints.

Jingye swooped on British Steel in 2019 after it collapsed into administration. The new owner promised more than £1bn of investment in the business to improve productivity and increase production.

However, the process have been delayed by the move towards decarbonisation, which has made plans to invest in British Steel’s highly polluting existing blast furnaces less attractive. 

One government source said Jingye was far from alone in indicating its interest in Liberty, adding “as have lots of companies”.

The Business Secretary, Kwasi Kwarteng, has repeatedly said the Government will do “all it can” to support the steel industry yet has refused to say whether he would prop up Liberty, and refused a request for  £170m taxpayer-backed rescue two months ago.

Insiders have hinted that ministers will not act to aid Liberty before it goes into administration, possibly copying the model adopted with British Steel. It was taken over by the Official Receiver and bankrolled by the state until a buyer was found. The process lasted almost a year and cost the taxpayer £588m. 

A spokesman for Jingye said: "We do not comment on commercial enquiries”. 

Source from Telegraph


(To contact the reporter on this story: leo.ji@steelhome.cn or 86-555-2238932 18616060095)
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