Chinese steelmaker Jingye complete British Steel rescue with loss of 400 jobs

British Steel

Chinese steelmaker Jingye Group has said it will complete its takeover of British Steel next week – saving 3,200 jobs, but 400 will be lost.

The announcement was hailed by Business Secretary Alok Sharma as a “significant milestone” in securing the manufacturer’s future, after it was placed into liquidation in May last year.

Unions had warned earlier this year that hundreds of jobs were likely to go as part of the rescue deal.

The company employed 4,000 people in the UK at the time of its collapse, a number which has since fallen to 3,700.

With 3,200 being saved in the Jingye deal and 100 jobs going to Barrett, it means 400 jobs will be lost.

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

Around 100 further jobs will transfer to Barrett Steel following the sale of four British Steel distribution centres.

Jingye chief executive 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 steel-making.

“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.”

The French government has not yet made a judgement on Jingye’s proposed acquisition of British Steel France, which is intended to be part of the deal.

Instead, 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 moving on the French assets.

Regarding the French division, Mr Li said: “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.”

UK Business Secretary Alok Sharma said: “Having met and spoken to British Steel employees, the unions and Jingye, I know just how committed they all are to a successful future for the business.

“Work continues towards completing the sale, which will give certainty to British Steel’s dedicated and talented workforce in Scunthorpe, Skinningrove and on Teesside.”

Loss-making British Steel, which was previously a subsidiary of the Indian conglomerate Tata, has flirted with insolvency on previous occasions as the economics of steel production in the UK have become less attractive.

British Steel fell into insolvency in May last year after the government decided against providing £30m to the company under its then-owner, Greybull Capital.