Published: Mon, November 11, 2019
Markets | By Otis Pena

Chinese firm in talks over '£70m deal' to buy British Steel

Chinese firm in talks over '£70m deal' to buy British Steel

Reports said Jingye would pay about £70 million (US$90 million) for British Steel, which collapsed into liquidation in May.

British Steel has been saved in a rescue deal by Chinese firm Jingye saving up to 4,000 jobs, the Insolvency Service has confirmed.

The deal could protect 4,000 jobs at British Steel's sites in Scunthorpe and neighbouring Teeside, alongside an additional 20,000 jobs in the supply chain and 1,000 more overseas.

Staff at the Scunthorpe facility have been told in an email that contracts between British Steel and Jingye have been.

British Steel Ltd was wound-up in the High Court on 22 May 2019, with the government's official receiver taking charge of the business.

Jingye is also set to sweeten the offer with the promise it can also access up to £300 million in loans, indemnities and grants to back its plan to boost production at the plant by 10%.

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The Official Receiver, who has been managing the administration, is expected to announce the decision later today.

Stace added that British Steel's output, which is roughly a third of the UK's steel production, not only complements Jingye, but may also open the door for the United Kingdom steel industry to compete globally.

British Steel had been in rescue talks with Ataer, which is a subsidiary of Turkey's state military retirement scheme Oyak.

The news comes after negotiations between the British steelmaker failed with Turkish military pension fund Ataer, forcing the United Kingdom company to seek further assistance after falling into administration in May.

"Any new owner would not just be acquiring a steel business, they would be taking on a dedicated and skilled workforce, who even through the uncertainty of recent months have been breaking production records to give the business a chance".

"I would be surprised if it did not get finalized, but it's not a done deal", he said.

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