China’s Jingye Group completes buyout of British Steel and pledges to invest £1.2 billion in company that collapsed last May
- Steelmaker Jingye Group completes buyout of British Steel after firm collapsed
- Chinese company pledged to invest £1.2 billion into the liquidated manufacturer
- British Steel employed around 5,000 workers at the time of its collapse last May
- Company, that’s main plant is in Scunthorpe, is second-largest steelmaker in UK
A Chinese firm completed its buyout of British Steel today, with an investment package pledge of £1.2 billion .
Steelmaker Jingye Group revived the British business that was placed into compulsory liquidation last May.
A statement from Jingye said it had completed the acquisition of British Steel’s UK and Dutch assets from the official receiver and confirmed it planned to invest £1.2 billion ($1.6 billion) in the company over the next 10 years.
British Steel employed around 5,000 workers at the time of its collapse and is the second-largest steelmaker in the country.
Jingye had said last week it would buy British Steel’s main plant, in Scunthorpe, even though it had not had a reply from the French government about a French unit seen as a potential obstacle to the deal.
British Steel works in Scunthorpe (pictured). Chinese firm Jingye Group completed its buyout of the company after it collapsed last May
Li Huiming, Jingye chief executive, said: ‘It has not been an easy journey since we first announced our intentions in November.’
Jingye reportedly offered £50m to buy British Steel after it collapsed last May.
Unions said although the company had been bought, 450 workers still face losing their jobs.
The company was placed under the control of the UK Insolvency Service as a result.
France regards British Steel’s operations there as a strategic activity because it supplies railway company SNCF and said last week four bidders had expressed interest in buying that unit.
Chinese industrial giant Jingye Group said it would complete on its takeover of British Steel. Pictured is the Scunthorpe plant in north Lincolnshire
A statement said: Jingye indicated on Monday it still hoped to buy the French operations at Hayange. ‘[It] is still subject to further negotiations with the relevant authorities in France and is hoped to be concluded separately.’
The Chinese group said its investment plans included installing an electric arc furnace, building a more efficient power plant and launching a new line for steel rebar, a product mainly used in construction.
British Steel was placed into compulsory liquidation last May after Greybull Capital, which bought it for a token one pound from Tata Steel in 2016, failed to secure funding to continue its operations.
Globally the steel sector is under pressure from weak demand, aggravated by the impact of the coronavirus outbreak.
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