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The Chinese owner of British Steel has rejected a £500m state rescue package in a move which raises fresh doubts about thousands of steel industry jobs.

Sky News has learnt that the offer was made by Jonathan Reynolds, the business secretary, in a letter sent to Jingye Group on Monday.

The proposal – aimed at facilitating the Scunthorpe-based group’s transition to green steel production – follows years of talks aimed at salvaging the future of the UK’s second-biggest producer.

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Sarah Jones, the industry minister, told a committee of MPs on Wednesday afternoon that an offer had been made by the government earlier this week, and it had been rejected by Jingye.

“We are still in talks with them at the moment,” she told the business and trade select committee.

The minister did not disclose the size of the offer, but Whitehall sources confirmed that it was £500m – equivalent to the sum awarded to the larger Tata Steel as part of a £1.25bn package finalised last year.

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Government sources said the offer had been calibrated after protracted discussions between ministers, officials and their advisers lasting many months.

However, the £500m package falls well short of the sum that Jingye has been seeking from the government during several rounds of talks since Labour won last summer’s general election.

The Chinese-owned group is thought to have requested £1bn or more from ministers – double the amount handed to Tata Steel, owner of the Port Talbot steelworks in South Wales, last autumn.

The gap between the government’s offer and Jingye’s demands means that thousands of steel jobs could yet be at risk.

British Steel, which was taken over by Jingye in 2020 after a spell in public ownership, employs about 3,500 people at its sites in Scunthorpe, Teesside and elsewhere.

It has been pushing for taxpayer funding to support a transition to green steelmaking by replacing Scunthorpe’s two blast furnaces with cleaner electric arc furnaces.

The rejection of the £500m offer leaves Scunthorpe’s future on a knife edge.

It is unclear whether the government is prepared to increase the amount of money it hands to Jingye, despite Ms Jones’s insistence that discussions are ongoing.

Asked whether British Steel’s blast furnaces would continue operating during negotiations, she said: “Our preference would be for them to keep going; until at the least they have secured the volume of steel imports to keep the mills going.

“Our preference would be that this steel is secured before they close these furnaces.”

Without the injection of funding from government that it had sought, Jingye may argue that its loss-making operations are no longer viable and opt to close the blast furnaces without the financing in place to replace their output.

Reports late last year suggested that nationalisation was an option being explored by ministers.

The government’s proposal comes at a deeply sensitive time for Britain’s steel industry, with fears of swingeing US tariffs exacerbating concerns that the sector’s viability will be put at risk.

Earlier this month, Sharon Graham, general secretary of the Unite union, called on ministers to designate steel as critical national infrastructure: “Our government must act decisively to protect the steel industry and its workers following the announcement of US tariffs.

“This is a matter of national security.

“Given the importance of steel to our economy and our everyday lives it is vital it is designated as critical national infrastructure and rules are introduced to ensure that the public sector always buys UK produced steel.”

Last month, Mr Reynolds published the government’s Plan for Steel consultation, which will include up to £2.5bn in funding for the industry, in line with a commitment in last year’s Labour election manifesto.

“The UK steel industry has a long-term future under this government,” he said.

“Britain is open for business, and this government has committed up to £2.5bn to the future of steel to protect our industrial heartlands, maintain jobs, and drive growth as part of our Plan for Change.”

During the same month, Mr Reynolds held further talks with Jingye Group’s boss, Li Huiming, in the latest chapter of a negotiation which has been dragging on for more than two years.

British Steel was bought by Jingye the year after it was placed into compulsory liquidation.

The company had been owned by private investment firm Greybull Capital.

British Steel declined to comment, while the Department for Business and Trade has been approached for comment on the details of its offer to Jingye.

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New Look owners pick bankers to fashion sale process

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New Look owners pick bankers to fashion sale process

The owners of New Look, the high street fashion retailer, have picked bankers to oversee a strategic review which is expected to see the company change hands next year.

Sky News has learnt that Rothschild has been appointed in recent days to advise New Look and its shareholders on a potential exit.

The investment bank’s appointment follows a number of unsolicited approaches for the business from unidentified suitors.

New Look, which trades from almost 340 stores and employs about 10,000 people across the UK, is the country’s second-largest womenswear retailer in the 18-to-44 year-old age group.

It has been owned by its current shareholders – Alcentra and Brait – since October 2020.

In April, Sky News reported that the investors were injecting £30m of fresh equity into the business to aid its digital transformation.

Last year, the chain reported sales of £769m, with an improvement in gross margins and a statutory loss before tax of £21.7m – down from £88m the previous year.

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Like most high street retailers, it endured a torrid Covid-19 and engaged in a formal financial restructuring through a company voluntary arrangement.

In the autumn of 2023, it completed a £100m refinancing deal with Blazehill Capital and Wells Fargo.

A spokesperson for New Look declined to comment specifically on the appointment of Rothschild, but said: “Management are focused on running the business and executing the strategy for long-term growth.

“The company is performing well, with strong momentum driven by a successful summer trading period and notable online market share gains.”

Roughly 40% of New Look’s sales are now generated through digital channels, while recent data from the market intelligence firm Kantar showed it had moved into second place in the online 18-44 category, overtaking Shein and ASOS.

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Coca-Cola brews up sale of high street coffee giant Costa

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Coca-Cola brews up sale of high street coffee giant Costa

The Coca-Cola Company is brewing up a sale of Costa, Britain’s biggest high street coffee chain, more than six years after acquiring the business in a move aimed at helping it reduce its reliance on sugary soft drinks.

Sky News can exclusively reveal that Coca-Cola is working with bankers to hold exploratory talks about a sale of Costa.

Initial talks have already been held with a small number of potential bidders, including private equity firms, City sources said on Saturday.

Lazard, the investment bank, is understood to have been engaged by Coca-Cola to review options for the business and gauge interest from prospective buyers.

Indicative offers are said to be due in the early part of the autumn, although one source cautioned that Coca-Cola could yet decide not to proceed with a sale.

Costa trades from more than 2,000 stores in the UK, and well over 3,000 globally, according to the latest available figures.

It has been reported to have a global workforce numbering 35,000, although Coca-Cola did not respond to several attempts to establish the precise number of outlets currently in operation, or its employee numbers.

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This weekend, analysts said that a sale could crystallise a multibillion pound loss on the £3.9bn sum Coca-Cola agreed to pay to buy Costa from Whitbread, the London-listed owner of the Premier Inn hotel chain, in 2018.

One suggested that Costa might now command a price tag of just £2bn in a sale process.

The disposal proceeds would, in any case, not be material to the Atlanta-based company, which had a market capitalisation at Friday’s closing share price of $304.2bn (£224.9bn).

At the time of the acquisition, Coca-Cola’s chief executive, James Quincey, said: “Costa gives Coca-Cola new capabilities and expertise in coffee, and our system can create opportunities to grow the Costa brand worldwide.

“Hot beverages is one of the few segments of the total beverage landscape where Coca-Cola does not have a global brand.

“Costa gives us access to this market with a strong coffee platform.”

However, accounts filed at Companies House for Costa show that in 2023 – the last year for which standalone results are available – the coffee chain recorded revenues of £1.22bn.

While this represented a 9% increase on the previous year, it was below the £1.3bn recorded in 2018, the final year before Coca-Cola took control of the business.

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Coca-Cola has been grappling with the weak performance of Costa for some time, with Mr Quincey saying on an earnings call last month: “We’re in the mode of reflecting on what we’ve learned, thinking about how we might want to find new avenues to grow in the coffee category while continuing to run the Costa business successfully.”

“It’s still a lot of money we put down, and we wanted that money to work as hard as possible.”

Costa’s 2022 accounts referred to the financial pressures it faced from “the economic environment and inflationary pressures”, resulting in it launching “a restructuring programme to address the scale of overheads and invest for growth”.

Filings show that despite its lacklustre performance, Costa has paid more than £250m in dividends to its owner since the acquisition.

The deal was intended to provide Coca-Cola with a global platform in a growing area of the beverages market.

Costa trades in dozens of countries, including India, Japan, Mexico and Poland, and operates a network of thousands of coffee vending machines internationally under the Costa Express brand.

The chain was founded in 1971 by Italian brothers Sergio and Bruno Costa.

It was sold to Whitbread for £19m in 1995, when it traded from fewer than 40 stores.

The business is now one of Britain’s biggest private sector employers, and has become a ubiquitous presence on high streets across the country.

Its main rivals include Starbucks, Caffe Nero and Pret a Manger – the last of which is being prepared for a stake sale and possible public market flotation.

It has also faced growing competition from more upmarket chains such as Gail’s, the bakeries group, which has also been exploring a sale.

Coca-Cola communications executives in the US and UK did not respond to a series of emails and calls from Sky News seeking comment on its plans for Costa.

A Lazard spokesperson declined to comment.

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TikTok puts hundreds of UK jobs at risk

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TikTok puts hundreds of UK jobs at risk

TikTok is putting hundreds of jobs at risk in the UK, as it turns to artificial intelligence to assess problematic content.

The video-sharing app said a global restructuring is taking place that means it is “concentrating operations in fewer locations”.

Layoffs are set to affect those working in its trust and safety departments, who focus on content moderation.

Unions have reacted angrily to the move – and claim “it will put TikTok’s millions of British users at risk”.

Figures from the tech giant, obtained by Sky News, suggest more than 85% of the videos removed for violating its community guidelines are now flagged by automated tools.

Meanwhile, it is claimed 99% of problematic content is proactively removed before being reported by users.

Executives also argue that AI systems can help reduce the amount of distressing content that moderation teams are exposed to – with the number of graphic videos viewed by staff falling 60% since this technology was implemented.

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It comes weeks after the Online Safety Act came into force, which means social networks can face huge fines if they fail to stop the spread of harmful material.

The Communication Workers Union has claimed the redundancy announcement “looks likely to be a significant reduction of the platform’s vital moderation teams”.

In a statement, it warned: “Alongside concerns ranging from workplace stress to a lack of clarity over questions such as pay scales and office attendance policy, workers have also raised concerns over the quality of AI in content moderation, believing such ‘alternatives’ to human work to be too vulnerable and ineffective to maintain TikTok user safety.”

John Chadfield, the union’s national officer for tech, said many of its members believe the AI alternatives being used are “hastily developed and immature”.

He also alleged that the layoffs come a week before staff were due to vote on union recognition.

“That TikTok management have announced these cuts just as the company’s workers are about to vote on having their union recognised stinks of union-busting and putting corporate greed over the safety of workers and the public,” he added.

Under the proposed plans, affected employees would see their roles reallocated elsewhere in Europe or handled by third-party providers, with a smaller number of trust and safety roles remaining on British soil.

The tech giant currently employs more than 2,500 people in the UK, and is due to open a new office in central London next year

A TikTok spokesperson said: “We are continuing a reorganisation that we started last year to strengthen our global operating model for Trust and Safety, which includes concentrating our operations in fewer locations globally to ensure that we maximize effectiveness and speed as we evolve this critical function for the company with the benefit of technological advancements.”

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