The press are reporting that China’s Jingye Group have agreed in principle to buy British Steel for £70m. British Steel entered Compulsory Liquidation in May 2019 with the Official Receiver acting as Liquidator. EY were appointed as Special Managers to assist with the case (note that we covered why this case was being dealt with as a Compulsory Liquidation and why it had to keep trading in a CPD Tap webcast).
The reports suggest that the deal is to be concluded with the Official Receiver shortly but the OR will continue to trade for a month. It is understood that employees are being informed of the situation, with further announcements expected later today.
British Steel is Scunthorpe’s biggest employer and the deal should help towards securing their 4,000 jobs and up to 20,000 in the overall supply chain. Although it has been suggested that despite plans to increase steel production from 2.5 million tonnes to 3 million at Scunthorpe there may have to be cuts in expenditure.
Jingye Group sells its products nationwide and exports them to more than 80 countries. Its total registered assets equal £4.4bn and has 23,500 employees.
Ironically one of the reasons for British Steel’s difficulties were reported as China flooding the market with cheap steel.
Hopefully this deal will see British Steel survive, with significant jobs saved.