British Steel future secure as Jingye set to complete £50m purchase
British Steel’s survival has finally been confirmed this morning as Chinese conglomerate Jingye announced that it would complete the acquisition of the troubled steelmaker next week.
The deal, which will be signed on 9 March, will preserve 3,200 of the firm’s jobs in Scunthorpe and Teeside, with 100 moving over to Barrett Steel after the sale of four distribution centres.
However, the acquisition does not at this stage involve the shares of British Steel France, which are subject to approval by the French government.
Jingye said that it had not yet had an indication from the French as to when a decision would be reached.
The £50m deal will see Jingye invest £1.2bn on the site, improving its energy efficiency and environmental footprint.
Jingye said it had agreed to the Official Receiver’s proposal, supported by the UK government, to complete the transaction in stages, first completing on the UK and Netherlands assets before completing on the French assets.
Since it failed last May, British Steel has been run by the Official Receiver and is being propped up by taxpayers.
Jingye’s offer, which was accepted in November, came after talks with Turkish company Ataer broke down because of what one source called “difficulties” with the Turkish government.
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In December it was revealed that the Hayange plant, which is one of the most profitable parts of the business, had been put up for sale separately to the rest of British Steel’s assets, with the blessing of the French government.
Chief executive Li Huiming said: “We are delighted to have reached this agreement and look forward to completing the initial transaction over the coming days so we can begin a new chapter in British steelmaking.
“I want to thank everyone who has been involved in making this deal happen, including British Steel employees, the Unions, and the British government. We will not misplace the trust that they have placed in us.
“We remain interested in purchasing the Hayange plant, which we firmly believe would have a bright future as part of a united group, and hope to see a positive decision from the French authorities in the near future.”
Business Secretary Alok Sharma welcomed the deal, saying:
“Jingye has reached a significant milestone in securing a deal for the future of British Steel.
“Having met and spoken to British Steel employees, the Unions and Jingye, I know just how committed they all are to a successful future for the business.
“Work continues towards completing the sale, which will give certainty to British Steel’s dedicated and talented workforce in Scunthorpe, Skinningrove and on Teesside.”
More to follow.