Jingye, a Chinese steelmaker, and British Steel agreed to acquire the business and assets of the UK company, which is in liquidation. The transaction will include the steelworks at Scunthorpe and UK mills and the subsidiary businesses of FN Steel, British Steel France and TSP Engineering. It is anticipated that the shares owned by British Steel in Redcar Bulk Terminal Limited will also be included in the sale.
Under the agreement, Jingye plans to invest GBP 1.2 billion (EUR 1.4 billion) in the business over the next decade in upgrading the plants and machinery, improving the new company’s environmental performance and boosting energy efficiency to place the operations on a more competitive and sustainable footing.
“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 Group Chairman Li Ganpo, said.
Jingye will further help to ensure a long-term sustainable future for British Steel and its employees by investing in identifying new markets and products. The Chinese company anticipates making offers to as many employees across the business as possible.
The company will now engage with the union representatives and employees ahead of completion of the sale, at which point the Official Receiver, EY, would hand over the running of British Steel to Jingye.
Jingye is committed to preserving UK jobs and investing in a workforce that can help to strengthen British Steel’s UK operations, and has already started the process of engaging positively with the unions and employees.
Completion of the contract is conditional on a number of matters, including the requisite regulatory approvals and certain employee consultation procedures. 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, whilst assisting Jingye to plan for the future.