China's Jingye Group agrees to complete British Steel takeover
04 March 2020
Chinese steelmaker Jingye Group has agreed to complete its 1.2 billion pounds ($1.5 billion) buyout of British Steel, despite uncertainty over the control of British Steel’s French unit.
Jingye said in a statement on Tuesday it will acquire British Steel’s main plant in the northern English town of Scunthorpe, even though it does not yet have a reply from the French government about a French unit seen as a potential obstacle to the deal.
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 per cent stake in Redcar Bulk Terminal (RBT) owned by British Steel. The transaction does not include the shares owned by British Steel Limited in RBT.
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.
The agreement follows comprehensive and constructive discussions with the government, unions, suppliers and employees in the UK and the Netherlands.
“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,” Jingye CEO Li Huiming, said.
: 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.
“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,” he added.