11 Nov 2019
£70m British Steel Rescue Deal on the Horizon
British Steel is expected to announce a £70m buyout by Chinese industrial firm Jingye, in a rescue deal that could save up to 4,000 UK jobs.
The stricken steel manufacturer, which has sites in Scunthorpe and Teesside, went into liquidation in May and has since been kept afloat by the government via the Official Receiver. It is the UK’s second largest steel producer, employing 4,000 workers, with some 20,000 jobs in the supply chain and a further 1,000 in Europe.
British Steel is attributed with a third of all steel production in the UK. A buyout of the business will be a significant development for the struggling steel industry in Britain, signalling the government’s commitment to the sector.
Founded in 1988, Jingye Group is a steel manufacturer that also deals with “real estate, finance, trade, pharmaceutical, hotels and tourism.” Their website states that the group employs over 22,000 people and exports to multiple countries. Ahead of the deal, it has been reported that the Chinese firm is hoping to increase production at the British Steel Scunthorpe site by over half a million tonnes a year.
The pending deal with Jingye comes after rescue talks with a subsidiary of the Turkish military’s pension fund, Ataer, ground to a halt. Speaking of the potential takeover, a spokesperson for UK trade union Community said:
“If this is confirmed, then we welcome this positive step towards securing British Steel under new ownership.
“The fact that there has been ongoing interest from both Ataer and now Jingye rightly demonstrates that potential buyers believe that British Steel can have a sustainable future.”
Should the deal go ahead, it is thought that the Official Receiver will continue to run British Steel for up to a month after the agreement has been confirmed. The Official Receiver is expected to make an announcement later today.