Chinese group Jingye rescues British Steel

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The Official Receiver and EY has confirmed that a sales contract has been entered into with Jingye Steel to acquire the business and assets of British Steel Limited

The UK Insolvency Service revealed that Jingye, a steel and iron producer with 23,500 employees, had agreed a sales contract to acquire British Steel, including its Scunthorpe steelworks in Lincolnshire.

The deal is expected to save up to 4,000 jobs and end the uncertainty surrounding the future of British Steel after it collapsed in May.

Jingye said on Monday (11 November) that it planned to invest £1.2bn into British Steel over the next decade.

The sales contract will include the steelworks at Scunthorpe, UK mills and shares of FN Steel BV, British Steel France Rail SAS and TSP Engineering.

The sale also includes the shares owned by BSL in Redcar Bulk Terminal Limited.

Roy Rickhuss, general secretary of the steelworkers’ trade union Community, commented: “We welcome this positive step towards securing British Steel under new ownership. Jingye’s interest rightly demonstrates that they believe that British Steel can have a sustainable future.

“Jingye are not just potentially acquiring a steel business, they would be taking on a dedicated and skilled workforce, who even through the uncertainty of recent months have been breaking production records to give the business a chance.

“We now look forward to discussing their detailed plans for the business.

“Whatever government is in place in the coming weeks it is vital that all steps are taken to successfully conclude this process – everyone needs to remain focussed on achieving that outcome to save our steel. Until a deal is completed, all viable options to securing the business should remain on the table.

“Thus far the government has taken the right approach when faced with a vital industrial asset under threat. By supporting the business through liquidation, the opportunity to save 5,000 jobs and thousands more in the supply chain and wider community, should now be realised. But we will remain vigilant that the outcome we all want to see is delivered.”

Paul McBean, Community’s lead rep at British Steel in Scunthorpe, added: “This is good news for everyone at British Steel and we are really hopeful that this will secure our future. We still need to have the detailed discussions but this is the kind of announcement we’ve been waiting for.

“It’s a tribute to all of the workforce who have done everything to get us to this point today and to show what we are capable of. I’d also like to thank everyone who has supported us, particularly our MP Nic Dakin who has been full square behind us throughout. It’s important that all sides focus on completing the deal, so we can safeguard all these jobs both in British Steel and our surrounding communities.”

Completion of the sales contract is conditional on a number of matters, including gaining the necessary regulatory approvals. The parties are working together to conclude a sale as soon as reasonably practicable.

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