British Steel agrees to save £ 70 million with the Chinese company

  British Steel Scunthorpe Website Copyright copyright

British Steel is to enter into a rescue agreement with China's Jingye Group, which can safeguard up to 4,000 jobs in the United Kingdom.

Jingye Group has agreed in principle to buy British Steel for £ 70m.

It is understood that the government will help in the form of loan guarantees and other financial support.

British Steel has been in operation by the government since May when the company went into liquidation.

In addition to employing 4,000 people at Scunthorpe and Teesside, British Steel supports an additional 20,000 jobs in the supply chain.

It is believed that although Jingye Group has promised to increase production, it has also warned that costs may be needed.

The Chinese group aims to increase production at Scunthorpe from 2.5 million tonnes per year to more than three million.

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Since May, the company has been run at a loss by the official recipient ̵[ads1]1; in fact, a private government agency.

British Steel's former owners, Greybull Capital, went away and said that Brexit concerns had decimated future order books.

Turkish deal

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

Ataer had signed a signed preliminary agreement to buy the company in August. [19659005] However, hopes that the deal could be completed faded last month when the official recipient of British Steel said the parties had not agreed terms.

The British industry has struggled for several years in the middle of claims that China has flooded the cheap steel market.

It prompted US President Donald Trump to impose a 25% import duty on steel imports from, among other things China and the EU.

Jingye has 23,500 employees, as well as the main production of steel and iron. businesses, it is also involved in hotels, tourism and real estate.

The majority of British Steel workers are employed at the Scunthorpe plant.

Jingye's chairman Li Ganpo recently visited British Steel's websites and met Scunthorpe MP Nic Dakin and Andrew Percy, representative of the Brigg and Goole constituencies.

Percy told the Grimsby Telegraph that he had received assurances about the company's future.

"They have assured us that if they make progress on this acquisition, they have every intention of investing to expand production to serve the UK and European market," he said.

Media playback is not supported on your device [19659027] Caption British Steel is Scunthorp's largest employer

Who is Jingye Group?

China's Jingye Group specializes in iron and steel, but also runs tourism, hotels and real estate.

It has 23,500 employees and a total registered asset of 39 billion yuan ($ 5.6 billion; $ 4.4 billion). According to the website, Jingye Group ranked 217th among the top 500 companies in China in 2019.

The company sells its products across the country and exports them to more than 80 countries and regions.

Jingye's products have been used in major projects such as Beijing Daxing International Airport and the underground system in Shijiazhuang.

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