Jingye Group has agreed to proceed towards the completion of its purchase of British Steel from the Official Receiver, the Chinese steelmaker stated Tuesday in an official note. Completion is due to occur March 9, unlocking Jingye’s pledged investment of GBP1.2 billion ($1.53 billion) to modernize British Steel sites.
Subject to the acceptance of employment offers, Jingye will acquire British Steel’s steelworks at Scunthorpe and UK mills at Teesside Beam Mill and Skinningrove, as well as subsidiary businesses FN Steel and TSP Engineering.
Following the announcement by Thai-based Sahaviriya Steel Industries company (SSI) that it intended to exercise its pre-emptive rights over the 50% stake in Redcar Bulk Terminal (RBT) owned by British Steel, the transaction does not include the shares owned by British Steel Limited in RBT. Neither does it currently include the assets of British Steel France, at Hayange. According to Jingye’s note, the French government has not yet made a judgment on Jingye’s proposed acquisition of British Steel France nor, at this stage, indicated when it may be in a position to do so.
“We are delighted to have reached this agreement and look forward to completing the initial transaction over the coming days so we can begin a new chapter in British steelmaking. I want to thank everyone who has been involved in making this deal happen, including British Steel employees, the Unions, and the British government. We will not misplace the trust that they have placed in us”, Jingye CEO Li Huiming said.
“We remain interested in purchasing the Hayange plant, which we firmly believe would have a bright future as part of a united group, and hope to see a positive decision from the French authorities in the near future,” he stated.
According to the official note Jingye has agreed to the Official Receiver’s proposal, supported by the UK government, to complete the transaction in stages, first completing on the UK and Netherlands assets before completing on the French assets, nevertheless the company said that it “will continue to work hard to reach a positive conclusion on the future of the Hayange plant in France”.
The agreement follows comprehensive and constructive discussions with the government, unions, suppliers and employees in the UK and the Netherlands, Jingye said.
British Steel, which went into compulsory liquidation on May 22, has about 3 million mt/year of production capacity in the UK, France and the Netherlands. Completion of the purchase will preserve 3,200 jobs in Scunthorpe, Teesside and elsewhere, securing a future for steelmaking in the region. A further approximately 100 jobs will transfer to Barrett Steel following the sale of four British Steel distribution centres.
Michael Gibbs, British Steel’s Official Receiver, said Tuesday he had nothing further to add on the planned transaction.