Chinese firm to rescue British Steel in £70m deal
Jingye Group hints at £500m refurbishment and investment after deal that will save thousands of jobs
British Steel is expected to announce a £70m ($89.5m) deal with the Chinese Jingye Group, rescuing the embattled firm from impending collapse.
The company has been kept afloat by the UK government after going into liquidation in May.
The deal, which has been agreed in principle, could stop extensive job losses. British Steel employs 4,000 people at its Teesside and Scunthorpe sites, with a further 20,000 jobs supported by its supply chain.
Jingye is a major industrial group in China’s Hebei province, but there are few details of its size and strength, and no sets of official accounts. The group is thought to have total assets of about 39bn yuan (£4.4bn). According to its website, Jingye Group ranked 217th among the top 500 enterprises in China in 2019.
Making up a third of Britain’s steel production, British Steel specialises in manufacturing “long products”, such as girders, high-quality steel wires and railway track.
This specialisation is thought to have attracted Jingye. It is thought that the group not only wants to keep British Steel afloat but actively to invest to increase production, planning a £500m refurbishment.
It is understood that the British government will help push the deal over the line by offering loan guarantees and other financial support.
The proposed deal has been welcomed on a local political level, with Tees Valley Mayor Ben Houchen saying: “Today’s announcement that a deal has been done and Teesside jobs have been protected and secured is wonderful”
However on a national level, some parties have voiced concerns. The Liberal Democrats, campaigning in the UK generel election, tweeted: “The takeover of a strategic British industry by an overseas firm should sound the alarm bell for Britain’s role in the world economy.”