Jingye Group, a multi-industrial company based in Hebei mainly specializing in iron and steel takes control of British Steel. The Chineese firm has more than 23,500 employees and an annual sales revenue of US$18.4 billion. British Steel was formed in 2016 after being sold by India’s Tata for £1 to the private equity firm Greybull Capital.
“It has not been an easy journey after we announced our intention to buy British Steel in November, but the longer I have spent in Scunthorpe, the more I have come to believe in the successful future of these steelworks,” said Li of Jingye Group.
He said Jingye Group’s investment over the next decade will put the business on a more competitive and sustainable footing, as it will modernize the site and improve energy efficiency and environmental performance, the rpeort said.
Ron Deelen, CEO of British Steel, said that he was confident that the UK company would seize the opportunity to further cement its reputation as a manufacturer of world-class steel.
The factory is a strategic national asset because it supplies track to France’s rail network. The risk that the government might veto Hayange transferring to Chinese ownership was seen as a potential obstacle to Jingye’s purchase, because the plant is one of the few profitable parts of British Steel.
But with little sign of a decision from the French government, the deal is expected to proceed anyway, with Jingye expected to pay £70m and invest a further £1.2bn.
About 3,200 staff were sent new contracts on Monday, while 100 are moving to the UK-based Barrett Steel, which is buying parts of British Steel in a separate deal.
A further 400 were informed during meetings that they would be made redundant on Monday, assuming the sale went ahead.