Jingye Completes Buyout of British Steel

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--A deal to save British Steel Limited (BSL) (Scunthorpe, England) and more than 3,000 jobs has been completed with China's Jingye, which will invest £1.2 billion ($1.5 billion) to rescue the struggling company.

Jingye stepped forward as the steelmaker's potential saviour last November, but the deal has hung in balance with the French government threatening to veto it. Around 3,200 jobs at the Teesside and Scunthorpe sites will be saved, but there will be more than 400 made redundant. For additional information, see November 18, 2020, article - British Steel Saved By China's Jingye.

British Steel, the U.K.'s second largest steelmaker, went into liquidation last May. 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.

Its plans for British Steel include:

• The development of an Electric Arc Furnace in Teesside
• The construction of a new 250-megawatt power plant to serve the Scunthorpe site. The new plant is expected to be around one-third more efficient than the one that it replaces
• Investment in the rolling mills to produce high-quality steel products to optimize the product portfolio
• Build a new rebar line
• Enhance the current rail mill

"It has not been an easy journey since we first announced our intentions in November but the longer I have spent in Scunthorpe, the more I have come to believe in the successful future of these steelworks and the employees that have made them famous throughout the world," explained Jingye Group Chief Executive Officer Li Huiming. "Together, we can forge a new partnership that will mark the beginning of a new illustrious chapter in the history of British steelmaking."

British Steel Chief Executive Officer Ron Deelen, said: "This is a momentous day for our business, and I'd like to thank everyone for their dedication during a challenging year. I'm confident we'll seize the incredible opportunity Jingye have given us to build on 150 years of heritage, and further cement British Steel's reputation as a manufacturer of world-class steel."

The deal was welcomed by U.K. Business Secretary Alok Sharma, who said, "The sale of British Steel represents an important vote of confidence in the U.K.'s steel industry. It also marks the start of a new era for those regions that have built their livelihoods around industrial steel production. I would like to pay tribute to everyone who has been involved in getting this deal over the line, in particular to British Steel's workforce for whom I recognise the uncertainty will have been challenging. I also want to reassure British Steel employees who may be facing redundancy that we are mobilising all available resources to give immediate on-the-ground support and advice to those affected."

The assets included in the transaction include British Steel's steelworks at Scunthorpe and U.K. mills at Teesside Beam Mill and Skinningrove, as well as subsidiary businesses FN Steel in the Netherlands and TSP Engineering. It does not include British Steel's French operations at Hayange. Jingye is still interested and said that the "acquisition is still subject to further negotiations with the relevant authorities in France and is hoped to be concluded separately."

The French government had previously threatened to veto the deal over the fate of the British Steel operations Hayange. The government regards it as a strategic national asset that supplies the French railway network, including state-owned train operator SNCF.

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