Jingye Group has agreed in principle to acquire British Steel for £70 million in a rescue deal that could preserve up to 4,000 jobs in Great Britain.
British Steel is set to announce the rescue deal with China's Jingye Group, which will amount to £70 million. The acquisition deal will rescue British Steel, which has been kept running by the government via the Official Receiver since it went into liquidation in May.
The agreement could safeguard around 4,000 employees working at British Steel's Scunthorpe and Teesside plants, another 20,000 in the supply chain, and an additional 1,000 workers based in France and the Netherlands.
One British Steel employee in Scunthorpe said: It has been a big concern, nobody knew what was happening... whether they had a job, could pay the mortgages, feed the families. It is great news."
While an agreement is scheduled to be signed, the company will remain under the Official Receiver for at least a month before being transferred.
Gareth Stace, director general of industry lobby group UK Steel, pointed out that the business being acquired was a "significant asset to our country" as it makes up a third of British steel production, mostly from Scunthorpe. He added that there was a need for "very significant investment" in the Scunthorpe works so the announcement from Jingye was "really welcome".
"Jingye are looking to make significant investment, are in for the longer term and therefore it isn't about keeping this site going for a year or two or a couple of years. To me, what I understand about the company, it's about looking to the future, so we're not going to be back in here in three years, five years, in 10 years' time," Stace argued.
British Steel was previously in negotiations with Ataer, a subsidiary of Turkey's state military retirement scheme Oyak but the company said in a statement that "the negotiations did not reveal a success mainly due to lack of support from the key stakeholders of the company and that the expected commercial efficiency could not be achieved."
