Jingye agrees conditional completion of British Steel acquisition

Jingye Group, a leading Chinese steelmaker, is pleased to announce that it has agreed to proceed towards the completion of its purchase of British Steel from the Official Receiver.

The completion will take place on 9 March, preserving 3,200 high-skilled jobs in Scunthorpe, Teesside and elsewhere, securing a long-term, sustainable future for steelmaking in the region as a key part of Britain’s industrial heritage. A further approximately 100 jobs will transfer to Barrett Steel following the sale of four British Steel distribution centres.

The completion of the deal will also unlock the pledged investment of £1.2bn billion to modernise the site as well as improving its energy efficiency and environmental performance.

Subject to the acceptance of employment offers, Jingye will acquire British Steel’s steelworks at Scunthorpe and UK mills at Teesside Beam Mill and Skinningrove, as well as subsidiary businesses FN Steel and TSP Engineering.

Following the announcement by SSI that it intended to exercise its pre-emption rights over the 50% stake in Redcar Bulk Terminal (RBT) owned by British Steel, the transaction does not include the shares owned by British Steel Limited in RBT. Neither does it currently include the assets of British Steel France. The French government has not yet made a judgement on Jingye’s proposed acquisition of British Steel France nor, at this stage, indicated when it may be in a position to do so.

Jingye has agreed to the Official Receiver’s proposal, supported by the UK government, to complete the transaction in stages, first completing on the UK and Netherlands assets before completing on the French assets. Jingye believes that the employees of British Steel, its customers, and those who rely on the business, deserve certainty on their future and has therefore agreed to first complete the acquisition of British Steel operations in the UK and Netherlands. Jingye will continue to work hard to reach a positive conclusion on the future of the Hayange plant in France.

The agreement follows comprehensive and constructive discussions with the government, unions, suppliers and employees in the UK and the Netherlands.

Jingye CEO Li Huiming, said: “We are delighted to have reached this agreement and look forward to completing the initial transaction over the coming days so we can begin a new chapter in British steelmaking. I want to thank everyone who has been involved in making this deal happen, including British Steel employees, the Unions, and the British government. We will not misplace the trust that they have placed in us.

“These steel works have existed for around 150 years and we are excited about what we can collectively achieve at British Steel to build a successful future for many years to come.

“We remain interested in purchasing the Hayange plant, which we firmly believe would have a bright future as part of a united group, and hope to see a positive decision from the French authorities in the near future.”

Source: British Steel, Photo: Fotolia