Chinese company Jingye Group announced on Monday that it has taken over British Steel in a rescue bid, securing the immediate future of the Scunthorpe steelworks and promising a sustainable chapter for the industry.
The completion of the deal saw the Chinese steelmaker acquire the company's United Kingdom and Netherlands assets, saving about 3,200 jobs after the company collapsed and was funded and run temporarily by the Official Receiver, part of the UK Insolvency Service, since it plunged into insolvency last May.
Jingye Group, a multi-industrial company based in Hebei province mainly specializes in iron and steel, with more than 23,500 employees. It has pledged to invest 1.2 billion pounds ($1.57 billon) on modernizing British Steel's plants and rejuvenating the business.
The purchase price was not disclosed but previous media reports suggested the Chinese company would pay 50 to 70 million pounds to British Steel, which was founded in 2016 when India's Tata Steel sold it to the private equity company Greybull Capital, before it entered insolvency less than three years ago and was placed in liquidation 10 months ago.
Li Huiming, the chief executive of Jingye, said: "It has not been an easy journey since we first announced our intentions in November but the longer I have spent in Scunthorpe, the more I have come to believe in the successful future of these steelworks.
"Jingye Group's 1.2 billion pounds of investment over the next decade will place this business on a more competitive and sustainable footing, as we modernize the site and improve energy efficiency and environmental performance. Together, we can forge a new partnership that will mark the beginning of a new illustrious chapter in the history of British steelmaking."
Ron Deelen, British Steel CEO, said: "This is a momentous day for our business ... I'm confident we'll seize the incredible opportunity Jingye have given us to build on 150 years of heritage, and further cement British Steel's reputation as a manufacturer of world-class steel."
Alok Sharma, the UK's Business Secretary, said: "The sale of British Steel represents an important vote of confidence in the UK's steel industry. It also marks the start of a new era for those regions that have built their livelihoods around industrial steel production."
Under the agreement, the acquired assets in the transaction include British Steel's steelworks at Scunthorpe and UK mills at Teesside Beam Mill and Skinningrove, as well as subsidiary businesses FN Steel in the Netherlands and TSP Engineering.
The deal does not include British Steel's French operations at Hayange, the acquisition of which is still subject to further negotiations with the relevant authorities in France and is hoped to be concluded separately.
The French government had previously said it would veto the deal as it considered the plant in northeast France a strategic national asset.
In response to the proposed acquisition of the French asset, Li said: "What we have agreed is that we are going to complete the transaction in stages. We complete the Dutch and the UK assets first and then later on we complete on the French assets.
"It is definitely still our intention to do that but we took the view that it was in no one's interest for that to be further delayed, and that's why we moved ahead with this first part of the transaction, but this is certainly our intention to continue."
Source: China Daily