France threatens to block British Steel rescue deal by Chinese firm Jingye

French finance minister Bruno LeMaire reportedly seeking to block takeover that would include sale of Hayange plant

A general view shows the British Steel works in Scunthorpe (Reuters)

France has threatened to veto a rescue deal for British Steel by Chinese firm Jingye.

British Steel collapsed seven months ago but Jingye stepped in with a last-minute investment package, agreeing to buy the stricken company for £50m.

But French finance minister Bruno Le Maire reportedly told chancellor Sajid Javid that he planned to block the takeover because British Steel owns a plant in France considered to be of strategic national importance.

Mr Lemaire said there was “no way” France would allow the proposed £50m sale of British Steel because it would mean the Hayange steel falling into the hands of a Chinese buyer, Sky News reported. The Hayange plant is a major supplier of track to France’s state-owned rail company SNCF.

Hayange is considered to be one of British Steel’s most valuable assets, meaning the French intervention could scupper Jingye’s deal putting up to 4,000 jobs at risk and a further 20,000 in the supply chain.

Despite the news, the UK government remained confident a deal would go ahead. A spokesperson for the Department for Business, Energy and Industrial Strategy said: “The deal with Jingye is very much on track and we expect that the transaction will complete in the coming weeks.”

British Steel has been losing around £1m a day since the government promised to fund the company following its collapse.

British Steel workers agreed terms on pay and conditions with Jingye last week. But workers' representatives said they expect to see up to 500 job losses following 10 days of talks with Jingye’s management.

The National Trade Union Steel Co-ordinating Committee, made up of Community, Unite and GMB union representatives, said: “As British Steel is in liquidation, any new owner could just offer new contracts with statutory minimum terms and conditions. There is no legal obligation to do more, nor to consult on any changes.

“These talks also took place in the context of the Special Managers having made it clear that there will not be another sales process for the whole business if the Jingye deal does not complete. British Steel would be broken up and sold in parts.