British Steel poised to ink rescue deal with Jingye Group

Daniel Fowler
November 11, 2019

British Steel is to be rescued by Chinese company Jingye following several weeks of discussions with a number of interested parties.

Jingye Group has agreed in principle to buy British Steel for £70m.

British Steel employs about 5,000 people directly in the United Kingdom in Scunthorpe, Skinningrove and Redcar, as well supporting thousands of roles in its supply chains.

British Steel has rescued by Chinese firm Jingye potentially saving up to 4,000 jobs, the Insolvency Service has said.

The UK government is reported by the BBC to be planning to help through loan guarantees and other financial backing. The Turkish firm is said to have fallen to third place in the bidding, also behind steel baron Sanjeev Gupta, who owns the UK-based Liberty House group.

"The business will continue to trade as normal during the period between exchange and completion".

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Labour's shadow business secretary Rebecca Long Bailey welcomed the "reassuring news" for the thousands of workers - while the government fails "to provide the support our steel sector urgently needs".

Steel groups have blamed cheap imports from China for their recent difficulties.

Now, Jingye Group is looking to increase production at the Scunthorpe site from 2.5 million tonnes of steel per annum to over three million, but did warn that cost-cutting measures may have to be implemented.

GMB national officer Ross Murdoch said: "We were impressed with the passion and enthusiasm from the Jingye team".

A spokesperson for steelworkers' union Community said: "If this [the sale] is confirmed, then we welcome this positive step towards securing British Steel under new ownership".

The Official Receiver, who has been managing the administration, is expected to announce the decision later today.

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