British Steel collapsed into liquidation in May but has now been acquired from the Official Receiver by Jingye Group, a £10bn-a-year steel maker from Hubei province in China.
Subject to regulatory approvals and certain employee consultation procedures, Jingye is buying the steelworks at Scunthorpe and UK mills at Teesside Beam Mill and Skinningrove, as well as the subsidiary businesses FN Steel, British Steel France and TSP Engineering. It is anticipated that the shares owned by British Steel Limited in Redcar Bulk Terminal Limited would also be included in the sale.
Jingye said that it plans to invest £1.2bn in British Steel over the next decade in upgrading the plants and machinery.
As to the question of redundancies, Jingye said that it “anticipates making offers to as many employees across the business as possible”.
It will now talk to union representatives and employees ahead of completion of the sale, at which point the Official Receiver, EY, would hand over the running of British Steel to Jingye.
Jingye Group chairman Li Ganpo said: “We are delighted to have reached this agreement. As a young company with large ambitions we have long admired British Steel and appreciate its illustrious heritage. We share with the thousands of British Steel workers a passion for this industry and we are determined that together we can transform this business.
“This is the beginning of a long journey. We know that this is only the start of the hard work of revitalizing British Steel. But we believe that this combination will create a powerful, profitable and sustainable business that will ensure the long-term future of thousands of jobs while producing the innovative high-quality steel products that the world needs.”
Jingye Group was founded by Li Ganpo in 1988 and operates 18 blast furnaces, producing 15 million tonnes of steel a year. Based in Hubei province in China, Jingye had sales of £10.1bn last year and employs 23,500 people.