Singapore Markets open in 7 hrs 40 mins

British Steel set to be rescued in £70m deal with Chinese firm

Samuel Osborne, Ben Chapman
A general view shows the British Steel works in Scunthorpe: Reuters

Chinese industrial firm Jingye is set to rescue British Steel after agreeing a £70m deal that could save up to 4,000 jobs and help support 20,000 more in the supply chain.

The Jingye Group announced plans to boost production at British Steel’s main Scunthorpe works as part of plans to invest £1.2bn in the company over the next decade.

The UK government's official receiver confirmed on Monday that it had accepted Jingye’s offer to buy British Steel out of liquidation on Monday after talks with a prospective Turkish buyer collapsed.

Staff at the Scunthorpe facility have been told in an email that contracts between British Steel and Jingye have been exchanged.

The announcement comes after talks stalled between the steel maker and Ataer, a Turkish firm said to have fallen to third place in the bidding, behind steel baron Sanjeev Gupta, who owns the UK-based Liberty House group.

The GMB union cautiously welcomed the announcement, which it said would finally provide some hope for British Steel workers.

The GMB's national officer, Ross Murdoch, said he had been impressed with the Jingye team’s “passion and enthusiasm” during a meeting in October.

“However, due diligence on this sale was completed very quickly and the devil will be in the detail.

“As such we will seek an urgent meeting with the Jingye group to discuss their precise strategy.

“GMB’s position is the new owner takes on the whole workforce on existing terms.”

Jingye says it anticipates making job offers to as many British Steel employees as possible.

Nic Dakin, the Labour MP for Scunthorpe, said: “The workforce at British Steel have done an outstanding job continuing to make and sell steel through this difficult few months.

“It looks as if we’re coming to a point where a new owner may well be determined and that would be very good news for the business and the communities that are around it.”

Gareth Stace, director general of trade body UK Steel, said: “While there remains much work still to be done, today’s announcement is a huge hurdle overcome on the way to delivering a sustainable future for this cornerstone of British industry. Government support will be critical in helping to deliver this.”

British Steel was put into compulsory liquidation on 22 May after Greybull Capital, which bought the firm for one pound from Tata Steel three years ago, failed to secure funding to continue its operations.

Read more

British Steel saved as China’s Jingye steps in. But what next?