China’s steelmaker Jingye Group completed the acquisition of British Steel on Monday, the second largest steel giant in the UK, which went into bankruptcy last year.
With three factories, Scunthorpe, Teesside, as well as Skinningrove, and about 5,000 employees, 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, and then taken over by UK Insolvency Service.
Jingye Group, located in north China’s Hebei Province, bought British Steel’s UK and Dutch assets, planning to invest 1.2 billion pounds (about 1.6 billion U.S. dollars) over the next 10 years to upgrade the company’s management and machinery.
According to UK Prime Minister Boris Johnson, Jingye’s investment is “a welcome boost that will not just secure thousands of jobs, but ensure British Steel continues to prosper.”
“We look forward to working with Jingye as they bring forward their investment plans, which have the potential to transform the business and secure a sustainable future,” said Roy Rickhuss, general secretary of the steel workers’ trade union Community, adding that Jingye is not just taking over a business, but taking on thousands of workers and giving new hope to steel communities in Scunthorpe and Teesside.
This is a “golden fruit” delivered at a very critical moment when both Chinese and British people are fighting COVID-19, Chinese Ambassador to Britain Liu Xiaoming told CGTN, adding that having the deal concluded vows confidence not only in UK market but also China-UK collaboration after Brexit.
“The deal we are marking today will not only save 3,200 jobs for the local community, transform and upgrade British Steel, and promote high-quality development of steel industry in the UK. It is also a vote of confidence in the mutually-beneficial cooperation between China and the UK after Brexit,” he said.
Jingye had said last week it would buy British Steel’s main plant, in the northern English town of 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.
“It has not been an easy journey since we first announced our intentions in November,” Jingye Chief Executive Li Huiming said.
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.
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 statement read.
Globally, the steel sector is under pressure from weak demand, aggravated by the impact of the coronavirus outbreak.
(With input from Reuters)