China’s Jingye Group Company has signed an agreement to acquire British Steel assets, ending months of speculation about the future of the troubled company, reported Bloomberg.
The Chinese company said that the agreement involves purchasing British Steel’s Scunthorpe plant, plus other assets in the UK, France and the Netherlands. Jingye Group plans to invest GBP 1.2 billion ($1.5 billion) in British Steel over the next decade but did not say how much it was paying for the assets.
“The deal is still subject to a number of matters including regulatory approvals, but should be completed as soon as reasonably practicable,” said the UK Insolvency Service
Britain’s No. 2 steelmaker was put into liquidation in May 2019, just three years after being acquired by private equity firm Greybull Capital for GBP 1. The company has struggled in the face of weak steel demand, surging costs and tough competition from cheaper imports.
Heavy industry in the UK has been in decline for decades as manufacturers move overseas to take advantage of cheaper labour costs, but politicians have been vocal about trying to save British Steel. A deal should safeguard thousands of jobs in the northern town of Scunthorpe.
Local media reported over the weekend that advisers were in the process of finalising a draft agreement involving a GBP 70 million deal with Jingye. The takeover will be aided by a GBP 300 million package of loans and other support.
Turkey’s Oyak Group said that its subsidiary Ataer Holding had ended talks to buy British Steel after deciding the acquisition was not commercially viable.