British Steel is state-owned once more

El Gov has passed legislation to bring British Steel into public ownership.

https://www.bbc.co.uk/news/articles/cjd4kvxpd3do

China has hit out at the nationalisation of British Steel, saying it "firmly opposes and is strongly dissatisfied with the British government's decision".
On Thursday, the UK government said that taking the loss-making firm into public hands would protect jobs and safeguard a "vital national capability".
The UK took control of British Steel's operations in Scunthorpe last year, though it was still owned by China's Jingye Group, limiting the government's ability to steer its future.

I saw some admiring comments on the socials yesterday for the ‘brutal’ way in which this has been done - the legislation didn’t expropriate the company itself, it expropriated all the assets and transferred them into a new company which was then re-named ‘British Steel’, effectively bringing the entire operation and all its assets into state ownership while leaving the shareholders of the Chinese former owner, Jingye, with the liabilities.

The Chinese government is of course fizzing, and Jingye is, bizarrely, demanding compensation, despite the fact that it previously claimed the Scunthorpe steelworks was losing £700k a day, which presumably means the UK government has just saved them a fortune.

Hopefully, an example has been set if we take over Thames Water. I don't see why the Government should compensate loss-making companies it's forced to take over.

[Carth]

I once worked at a profitable UK company that was taken over by a foreign business with similar businesses elsewhere. Funnily enough we were soon declared to be losing £100 million a year and asset stripped

Originally Posted by Carth

I once worked at a profitable UK company that was taken over by a foreign business with similar businesses elsewhere. Funnily enough we were soon declared to be losing £100 million a year and asset stripped

What they do is borrow billions of pounds/dollars to buy the company, using its assets/profit margins as collateral*, then have to spend all the profits paying back the loans, which leaves little to invest in the company, which means they have to cut costs (people/sites), which leads to customers dissatisfaction, reducing sales/profits more, then they sell off the loss-making company to another subsidiary, which can then write off the losses and cannibalise the assets.

*all the while taking management fees at every step of the way…

[1andrew1]

Worth pointing out that the Scunthorpe assets nationalised recently represent only part of the British Steel of the 1990s.

The majority of that company is now in other hands including Tata Steel.