Chinese steel producer Hebei Jingye Group has managed to save British Steel from liquidation, while at the same time securing more than 3,200 jobs in its facilities. The Chinese company reportedly completed the buyout of British Steel, which includes the purchase of its major facilities in the UK and several other facilities throughout Europe.
Under the completed deal, Jingye Group will be taking over British Steel's Teesside Beam Mill, its steelworks facility in Scunthorpe, and its steel mill in Skinningrove. The deal also included the purchase of the company's subsidiary, FN Steel in the Netherlands and TSP Engineering.
Jingye Group is reportedly still negotiating with French authorities and regulators over the acquisition of British Steel's French operations in Hayange. Jingye CEO, Li Huiming, mentioned in a statement that they are still working on completing all relevant transaction to take over all of British Steel's operations in Europe. The first stage of the acquisition will involve the takeover of the company's Dutch and UK assets, which will then be followed by the takeover of its French assets.
The Hebei-based company is currently one of China's largest steel and iron producers, with over 23,500 employees and annual sales of more than $18.4 billion. As part of its plans to bolster British Steel's operations and rejuvenate its business, Jingye Group had revealed that it is planning to spend more than $1.5 billion to modernize the UK company's operations.
The company stated that it does see a bright future in British Steel's business moving forward. Through further investments over the next decade, Jingye aims to make have British Steel in a more competitive and sustainable footing. British Steel CEO, Ron Deelen, expressed the same sentiment and added that he is confident that the company can restore its reputation as a manufacturer of world-class steel.
Following its insolvency in May of last year, British Steel has been under the UK Insolvency Service through its Official Receiver department. The exact amount of the acquisition was not immediately disclosed by both parties, but previous reports had pegged the transaction to be somewhere between $65 million to $85 million.
Jingye Group's purchase of British Steel will be the second major international purchase made by a Chinese steel company abroad. In 2016, Hebei-based steel company HBIS Group had acquired troubled steelmaker Smederevo in Serbia, effectively saving the company and securing more than 5,000 jobs. Since the purchase, HBIS has managed to become Serbia's second-largest steel exporter, producing more than 1.4 million metric tons of steel annually.
