Chinese Company to Acquire British Steel

A statement from the Official Receiver said: “Completion of the 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. The business will continue to trade as normal during the period between exchange and completion. Support from employees, suppliers and customers since the liquidation has been a critical factor in achieving this outcome.”

The purchase price has not been revealed, but sources say it is around £50 million ($64.2 million). Jingye says it will invest £1.2 billion ($1.5 billion) to upgrade the plants and equipment and ramp up steel production from 2.5 million metric tons per year to 3.0 million.

Jingye says it is committed to ensuring a long-term sustainable future for British Steel and its employees. The company will hold talks with union representatives before the sale is completed and said it “anticipates making offers to as many employees across the business as possible.“

“This is the beginning of a long journey,” said Jingye Group Chairman Li Ganpo. “We know that this is only the start of the hard work of revitalizing British Steel. But we believe that this combination will create a powerful, profitable and sustainable business that will ensure the long-term future of thousands of jobs, while producing the innovative high-quality steel products that the world needs.”

Jingye Steel was founded in 1994 in China’s Hebei province. The company posted revenue of $13 billion in 2018 and has invested in higher-end environmentally efficient plants.

British Steel was created when Greybull Capital bought the Long Products Europe business of Tata Steel. The company is one of two remaining integrated steelworks in the UK, running two blast furnaces at the Scunthorpe plant.