Chinese steelmaker Jingye Group is set to buy British Steel in a deal said to be worth £70 million (EUR 81 million).
Media reports in the UK say British Steel will shortly announce a takeover that should secure the future of its sites in Scunthorpe and on Teesside. The plants employ 4000 people and support a supply chain of around 20 000. The deal also includes 1000 jobs in France and the Netherlands.
British Steel has been kept running by the Government since May while a buyer is sought. It is expected that the £70 million deal will be backed by state loan guarantees and other financial support.
Gareth Stace, director general of the industry lobby group UK Steel, told the BBC that ‘very significant investment’ was required at the Scunthorpe works. ‘Jingye are in for the longer term and therefore it isn’t about keeping this site going for a year or two,’ he said. ‘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 believes the purchase would complement Jingye’s Chinese operation. British Steel makes long products such as railway tracks and the high-quality steel wire used in car tyres and other industrial applications.
Jingye was founded in 1994 and has 23,500 employees. As well as steel, it has interests in hotels, chemicals and real estate.
British Steel’s previous owners, Greybull Capital, gave up on the company, saying Brexit concerns had hit forward order books. In August, talks with with Ataer, a subsidiary of Turkey’s state military retirement scheme, came to nothing.
Would you like to share any interesting developments or article ideas with us? Don't hesitate to contact us.