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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--British Steel Limited (BSL) (Scunthorpe, England), the U.K.'s second-largest steelmaker, has found its white knight in China's Jingye, which will invest £1.2 billion ($1.5 billion) to rescue the struggling company and save up to 4,000 jobs.
Jingye has entered into an agreement with the U.K. government's official receiver to acquire the business and assets of British Steel (in liquidation), including the steelworks at Scunthorpe and U.K. mills and the subsidiary businesses of FN Steel, British Steel France and TSP Engineering. It is anticipated that the shares owned by BSL in Redcar Bulk Terminal Limited also will be included in the sale. British Steel collapsed during the summer after the government refused a bailout package, jeopardising approximately 24,000 jobs--5,000 direct employees and 20,000 that relied on its supply chain. Most of the employees work at the company's Scunthorpe blast furnace and steel plant, where the products span the construction, rail, specialist steel and wire rod sectors. Most of the products are exported to the European Union (EU) and Turkey.
Industrial Info reported last month that Turkey's Ataer Holdings, owned by the Turkish army retirement fund Oyak, was close to agreeing a deal for British Steel, with unofficial reports estimating that it would pay up to £70 million ($90.6 million) for the business and invest £900 million ($1.16 billion) going forward. For additional information, see October 29, 2019, article - Turkish Buyer Could Save British Steel.
A statement from the Official Receiver said: "Completion of the contract is conditional on a number of matters, including gaining the necessary regulatory approvals. The parties are working together to conclude a sale as soon as reasonably practicable. The business will continue to trade as normal during the period between exchange and completion. Support from employees, suppliers and customers since the liquidation has been a critical factor in achieving this outcome."
"Jingye plans to invest £1.2 billion in the business over the next decade in upgrading the plants and machinery, improving the new company's environmental performance and boosting energy efficiency to place the operations on a more competitive and sustainable footing," Jingye stated. "Jingye will further help to ensure a long-term sustainable future for British Steel and its employees by investing in identifying new markets and products. Jingye anticipates making offers to as many employees across the business as possible."
Jingye Group Chairman Li Ganpo, added: "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 employs 23,500 people, and alongside its core steel and iron making businesses, it also has interests in tourism, hotels and real estate. Its steel products have been used in major Chinese projects including Beijing Daxing International airport and the underground system in Shijiazhuang, as well as being exported to 80 countries worldwide.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
Jingye has entered into an agreement with the U.K. government's official receiver to acquire the business and assets of British Steel (in liquidation), including the steelworks at Scunthorpe and U.K. mills and the subsidiary businesses of FN Steel, British Steel France and TSP Engineering. It is anticipated that the shares owned by BSL in Redcar Bulk Terminal Limited also will be included in the sale. British Steel collapsed during the summer after the government refused a bailout package, jeopardising approximately 24,000 jobs--5,000 direct employees and 20,000 that relied on its supply chain. Most of the employees work at the company's Scunthorpe blast furnace and steel plant, where the products span the construction, rail, specialist steel and wire rod sectors. Most of the products are exported to the European Union (EU) and Turkey.
Industrial Info reported last month that Turkey's Ataer Holdings, owned by the Turkish army retirement fund Oyak, was close to agreeing a deal for British Steel, with unofficial reports estimating that it would pay up to £70 million ($90.6 million) for the business and invest £900 million ($1.16 billion) going forward. For additional information, see October 29, 2019, article - Turkish Buyer Could Save British Steel.
A statement from the Official Receiver said: "Completion of the contract is conditional on a number of matters, including gaining the necessary regulatory approvals. The parties are working together to conclude a sale as soon as reasonably practicable. The business will continue to trade as normal during the period between exchange and completion. Support from employees, suppliers and customers since the liquidation has been a critical factor in achieving this outcome."
"Jingye plans to invest £1.2 billion in the business over the next decade in upgrading the plants and machinery, improving the new company's environmental performance and boosting energy efficiency to place the operations on a more competitive and sustainable footing," Jingye stated. "Jingye will further help to ensure a long-term sustainable future for British Steel and its employees by investing in identifying new markets and products. Jingye anticipates making offers to as many employees across the business as possible."
Jingye Group Chairman Li Ganpo, added: "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 employs 23,500 people, and alongside its core steel and iron making businesses, it also has interests in tourism, hotels and real estate. Its steel products have been used in major Chinese projects including Beijing Daxing International airport and the underground system in Shijiazhuang, as well as being exported to 80 countries worldwide.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
