British Steel (2016–present)

Last updated

British Steel Limited
FormerlyJingye Steel (UK) Ltd (2019–2020) [1]
Industry Steel
Founded2016
Headquarters Scunthorpe, England, UK
Products Long steel products
Number of employees
3,200 [2]
Parent Jingye Group [3]
Website britishsteel.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.

Contents

History

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

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]

In August 2020, UK-based Liberty Steel acquired the former Sogerail plant in Havange, France. [21]

Operations

Scunthorpe Works BOS plant British Steel - BOS plant (geograph 5763104).jpg
Scunthorpe Works BOS plant

At creation in 2016, the business consisted of:

Notes

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

Related Research Articles

<span class="mw-page-title-main">British Steel (1967–1999)</span> Steelmaking enterprise in the United Kingdom

British Steel was a major British steel producer. It originated from the nationalised British Steel Corporation (BSC), formed in 1967, which was privatised as a public limited company, British Steel plc, in 1988. It was once a constituent of the FTSE 100 Index. The company merged with Koninklijke Hoogovens to form Corus Group in 1999.

<span class="mw-page-title-main">Teesside</span> Conurbation in England

Teesside is a built-up area around the River Tees in North East England, split between County Durham and North Yorkshire. The area contains the towns of Middlesbrough, Stockton-on-Tees, Billingham, Redcar, Thornaby-on-Tees, and Ingleby Barwick. Teesside's economy was once dominated by heavy manufacturing until deindustrialisation in the latter half of the 20th century. Chemical production continues to contribute significantly to Teesside's economy.

Tata Steel Limited is an Indian multinational steel-making company, based in Jamshedpur, Jharkhand and headquartered in Mumbai, Maharashtra. It is a part of the Tata Group.

<span class="mw-page-title-main">Appleby Frodingham Railway</span>

The Appleby Frodingham Railway - Scunthorpe is based at Scunthorpe in North Lincolnshire. The society owns locomotives and rolling stock but not the railway it runs on. The name comes from the Appleby-Frodingham Steel Company, now known as British Steel Limited Scunthorpe after the companies buyout by Greybull Capital in 2016, and after going into compulsory liquidation in 2019, Jingye Group. The railway operates entirely within the Steelworks limits over tracks normally used for moving molten iron, steel and raw materials. Trains travel between 7 and 15 miles, all within the steelworks.

<span class="mw-page-title-main">Tata Steel Europe</span> Multinational steelmaking company

Tata Steel Europe Ltd. was a steelmaking company headquartered in London, England, with its main operations in the United Kingdom and the Netherlands. The company was created in 2007, when Tata Group took over the British-Dutch Corus Group.

<span class="mw-page-title-main">Dorman Long</span> British steel company

Dorman Long & Co was a UK steel producer, later diversifying into bridge building. The company was once listed on the London Stock Exchange.

<span class="mw-page-title-main">Tata Steel Netherlands</span>

Koninklijke Hoogovens known as Koninklijke Nederlandse Hoogovens en Staalfabrieken (KNHS) until 1996 or informally Hoogovens. was a Dutch steel producer founded in 1918. Since 2010, the plant is named Tata Steel IJmuiden.

<span class="mw-page-title-main">Port Talbot Steelworks</span> Steel production plant in Port Talbot, Wales

Port Talbot Steelworks is an integrated steel production plant in Port Talbot, Wales, capable of producing nearly 5 million tonnes of steel slab per annum. This makes it the larger of the two major steel plants in the United Kingdom and one of the largest in Europe. Over 4,000 people work at the plant.

<span class="mw-page-title-main">Teesside Steelworks</span>

The Teesside Steelworks was a large steelworks that formed a continuous stretch along the south bank of the River Tees from the towns of Middlesbrough to Redcar in North Yorkshire, England. At its height there were 91 blast furnaces within a 10-mile radius of the area. By the end of the 1970s there was only one left on Teesside. Opened in 1979 and located near the mouth of the River Tees, the Redcar blast furnace was the second largest in Europe.

<span class="mw-page-title-main">Fire and Steel Festival</span>

Fire and Steel Festival was a one-day festival held in Redcar, North Yorkshire, set against the background of the industrial furnace of the largest steelworks in Europe and Redcar’s coast line.

<span class="mw-page-title-main">Scunthorpe Steelworks</span>

The Iron and Steel Industry in Scunthorpe was established in the mid 19th century, following the discovery and exploitation of middle Lias ironstone east of Scunthorpe, Lincolnshire, England.

<span class="mw-page-title-main">Liberty Steel Group</span> British industrial and metals company

Liberty Steel Group Holdings UK Ltd (LSG), which is also referred to as Liberty House or Liberty House UK, is a British industrial and metals company founded in the United Kingdom in 1992 by industrialist Sanjeev Gupta. It is headquartered in London, England, and has offices in Dubai, Singapore and Hong Kong.

Sanjeev Gupta is an Indian-born British businessman, and the founder of Liberty House Group. He is the CEO and chairman of GFG Alliance, an international conglomerate that operates primarily in the steel and mining industries. Following the collapse of Greensill Capital in 2021, Sanjeev Gupta has been under scrutiny for his ties to the failed company, which involved opaque financing and sales invoices that Greensill's administrator has been unable to verify.

<span class="mw-page-title-main">Greybull Capital</span> British private investment company

Greybull Capital LLP is a private investment company that specialises in medium- to long-term investments in UK-based companies. It was incorporated as a limited liability partnership in April 2010. In the aftermath of the financial crisis of 2007–2008, Greybull's strategy was to buy distressed firms and return them to success.

Skinningrove steelworks is a steel mill in Skinningrove, North Yorkshire, England. The business was formed in 1874 as the Loftus Iron Company, after a liquidation of the company reformed in 1880 as the Skinningrove Iron Company. The works expanded from producing only pig iron to include steel production in the early 20th century, with mills specialising in long products including railway rail. As part of the business the company constructed a jetty at Skinningrove, and owned an ironstone mine in Loftus.

Sogerail is a railway rail manufacturer near Hayange, in the Lorraine region of France. The company was formed 1994 as a subsidiary of Usinor-Sacilor.

Marc Joseph Meyohas is a French, London-based businessman who is the managing partner in Greybull Capital, which he founded with his brother Nathaniel Meyohas.

Nathaniel Jerome Meyohas is a French, London-based, businessman who is a founding partner of Blandford Capital. Until 2018 Nathaniel was a Partner at Greybull Capital.

<span class="mw-page-title-main">Redcar Bulk Terminal</span> Deep sea East Coast port in Redcar and Cleveland, Northern England

Redcar Bulk Terminal (RBT), also known as Redcar Ore Terminal, is a privately run dock at the mouth of the Tees Estuary in North Yorkshire, England. The port is used for the transhipment of coal and coke and for many years was the import dock for iron ore destined for Redcar Steelworks under British Steel Corporation, British Steel plc, Corus, Tata Steel Europe and Sahaviriya Steel Industries.

<span class="mw-page-title-main">Sheerness Steelworks</span>

Sheerness Steelworks was a steel plant located at Sheerness, on the Isle of Sheppey, in Kent, England. The plant opened in 1971 and produced steel via the Electric Arc Furnace (EAF) method rather than as a primary metal by the smelting of iron ore. The plant has closed down twice in its history; first in 2002 and again in 2012. Current owners Liberty House, had announced plans to re-open part of the site in 2016.

References

  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. 1 2 "British Steel: Takeover by Chinese firm completed". BBC News. Archived from the original on 9 March 2020. Retrieved 9 March 2020.
  4. 1 2 "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. "UK's Liberty Steel acquires French rail producer Hayange". 17 August 2020. Retrieved 17 August 2020.
  22. "British Steel plans to shut furnaces putting up to 2,000 jobs at risk". BBC News. 6 November 2023. Retrieved 6 November 2023.