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British Steel (2016–present)

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For other uses, see British Steel (1967–1999).
British Steel Limited
FormerlyJingye Steel (UK) Ltd (2019–2020)[1]
IndustrySteel
Founded2016
HeadquartersScunthorpe, England, UK
ProductsLong steel products
Number of employees
3,200[2]
ParentJingye Group[3]
Websitebritishsteel.co.uk

British Steel Limited is a long steel products business founded in 2016 with assets acquired from Tata Steel Europe by Greybull Capital, then acquired by Jingye Group in 2020.[4] The primary steel production site is Scunthorpe Steelworks, with rolling facilities at Skinningrove Steelworks, Teesside.

History

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See also: Tata Steel Europe

During the 2010s, a combination of reduced demand for steel in Europe (see Financial crisis of 2007–08 and Great Recession) and high company indebtedness saw the Tata Group begin a sales process for the long products division of Tata Steel Europe to the Klesch Group.[5] In 2014 the long products division employed approximately 6,500 workers and was operating with 2.8 million tonne p.a. capacity. The division included primary production at Scunthorpe steelworks, mills in Teesside (Teesside beam mill, Skinningrove and Darlington special profiles), France (Hayange rail mill) and Scotland (Dalzell and Clydebridge), along with other assets, now sold Immingham Bulk Terminal.[6] In late 2014 estimates for the value of the property was approximately $1.4 billion.[7] Talks during August 2015 on the acquisition ended unsuccessfully, with Klesch citing energy prices and (dumping of) Chinese steel imports as factors against the sale.[8][9] The Scottish facilities were mothballed in late 2015, and then sold to Liberty House Group in 2016.[10][11]

In late 2015 a preliminary agreement was made with Greybull Capital for the sale of the long products division.[12] The sale was agreed to on 11 April 2016 for a nominal £1, with Greybull taking over the assets and liabilities of the division. At takeover the division employed approximately 5,000 workers, predominately in the UK.[13] The sale was completed at the end of May 2016, with the resulting business renamed British Steel.[14][note 1] As part of the takeover, new agreements were made with workers and unions, including a wage cut, end to bonus schemes, and the end of a final salary pension scheme. The British Steel Pension Scheme (BSPS) was not included in the sale. Thanks to a restructuring effort led by Bimlendra Jha (then Executive Chairman of Longs Steel U.K.) Greybull stated that at acquisition the business was profitable.[16]

In June 2017, it was reported that the previously loss-making plant at Scunthorpe was once again back in profit, a year after Greybull took the concern over from Tata Steel. The 2015-2016 financial year saw a loss of £79 million, while 2016-2017 produced a profit of £47 million before tax. In light of this, British Steel Limited announced that the 3% pay cut agreed to by the workers on takeover, would be reversed.[17]

Insolvency

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On 22 May 2019, British Steel was placed into an insolvency process, putting 5,000 jobs in the UK at risk and endangering 20,000 in the supply chain. The move followed a breakdown in rescue talks between the government and the company's owner, Greybull. The Government's Official Receiver took control of the company as part of the insolvency process. Accountancy firm EY took on the role of Special Manager and is attempting to find a buyer for the business.[18] Theresa May announced to parliament that HM Treasury had "agreed an indemnity for the official receiver to enable British Steel to continue to operate in the immediate future". The Guardian also reported in the same article that "The number of people employed in UK steel manufacturing has fallen by 300,000 since 1971", from 310,000 to around 10,000 in 2019.[19]

In August 2019, Oyak, a Turkish army pension fund announced that it planned to take over British Steel by the end of 2019 however talks stalled.[20]

In November 2019, Jingye Group, a Chinese TVE, agreed in principle to buy British Steel for £70 million.[4] The take-over was completed in March 2020.[3]

Operations

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Scunthorpe Works BOS plant

At creation in 2016, the business consisted of:

Notes

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  1. ^ The company "British Steel Limited" was incorporated as a private limited company at Companies House on 13 February 2015.[15]

References

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  1. ^ "British Steel Limited overview - Find and update company information - GOV.UK". Companies House. 7 November 2019. Retrieved 13 February 2024.
  2. ^ "Statement on the sale of British Steel Limited (British Steel, BSL or The Company)". ey.com. 9 March 2020. Retrieved 17 August 2020.
  3. ^ a b "British Steel: Takeover by Chinese firm completed". BBC News. Archived from the original on 9 March 2020. Retrieved 9 March 2020.
  4. ^ a b "British Steel agrees £70m rescue with Chinese firm". BBC News. 10 November 2019. Retrieved 10 November 2019.
  5. ^ Shanker, Abhishek; Singh, Rajesh Kumar (27 October 2014). "Tata Steel Starts Debt Clean-Up After Corus Purchase Mess". Retrieved 1 June 2016.
  6. ^ "Klesch signs MoU with a view to purchase Tata Steel's Long Products Europe business" (PDF). Klesch Group. 15 October 2014. Archived from the original (PDF) on 11 April 2016. Retrieved 1 June 2016.
  7. ^ MacDonald, Alex (15 October 2014). "Tata Steel in Talks to Sell European Business to Klesch Group". www.wsj.com. Retrieved 1 June 2016.
  8. ^ "Klesch abandons Tata Steel's Long Products talks". BBC News. 4 August 2015. Retrieved 1 June 2016.
  9. ^ Hollinger, Peggy (3 August 2015). "Industrialist walks away from buying Tata's Scunthorpe steel plant". ft.com. Retrieved 1 June 2016.
  10. ^ "270 jobs go as Tata Steel closes two plants in Scotland". BBC News Scotland. 20 October 2015. Retrieved 1 June 2016.
  11. ^ Picken, Andrew (20 March 2016). "Scottish steel jobs saved as deal struck to reopen plants". Sunday Post. Retrieved 1 June 2016.
  12. ^ "Tata Steel in talks to sell Scunthorpe and Teesside plants". BBC News. 22 December 2015. Retrieved 1 June 2016.
  13. ^ Sources:
  14. ^ Rodionova, Zlata (1 June 2016). "Tata Steel saves 4,400 jobs with sale of Scunthorpe site to Greybull Capital". The Independent. Retrieved 1 June 2016.
  15. ^ "BRITISH STEEL LIMITED – Company number 09438207". beta.companieshouse.gov.uk. Retrieved 1 June 2016.
  16. ^ Tovey, Alan; Davidson, Lauren (1 June 2016). "Greybull claims Scunthorpe steelworks is 'profitable' as it takes control from Tata Steel". The Telegraph. Retrieved 2 June 2016.
  17. ^ Lea, Robert (2 June 2017). "British Steel gets back on track with immediate return to profit". The Times. No. 72239. p. 44. ISSN 0140-0460.
  18. ^ "British Steel enters insolvency endangering 5,000 jobs". BBC News. 22 May 2019. Retrieved 22 May 2019.
  19. ^ "British Steel enters insolvency after rescue talks with government fail". The Guardian. 22 May 2019. Retrieved 22 May 2019.
  20. ^ "Turkish army pension fund to buy British Steel". BBC News. 16 August 2019. Retrieved 16 August 2019.
  21. ^ "British Steel plans to shut furnaces putting up to 2,000 jobs at risk". BBC News. 6 November 2023. Retrieved 6 November 2023.
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