Steelmaker Jingye Group has completed its buyout of British Steel, reviving a business that was placed into compulsory liquidation last May.
A statement from Jingye said it had completed the acquisition of British Steel’s UK and Dutch assets from the official receiver and confirmed it planned to invest £1.2bn ($1.6bn) in the company.
Jingye had said last week it would buy British Steel’s main plant, in the northern English town of Scunthorpe, even though it had not had a reply from the French government about a French unit seen as a potential obstacle to the deal.
“It has not been an easy journey since we first announced our intentions in November,” Jingye Chief Executive Li Huiming said.
France regards British Steel’s operations there as a strategic activity because it supplies railway company SNCF and said last week four bidders had expressed interest in buying that unit.
Jingye indicated on Monday it still hoped to buy the French operations at Hayange. “(It) is still subject to further negotiations with the relevant authorities in France and is hoped to be concluded separately,” the statement said.
The Chinese group said its investment plans included installing an electric arc furnace, building a more efficient power plant and launching a new line for steel rebar, a product mainly used in construction.
British Steel was placed into compulsory liquidation last May after Greybull Capital, which bought it for a token one pound from Tata Steel in 2016, failed to secure funding to continue its operations.
Globally the steel sector is under pressure from weak demand, aggravated by the impact of the coronavirus outbreak.
There will be 449 redundancies as part of the deal but 3,200 jobs will be saved. The proposed £1.2bn investment initiatives includes the development of an electric arc furnace in Teesside, the construction of a new 250MW power plant to serve the Scunthorpe site, investment in the rolling mills and a new rebar line.
UK Prime Minister Boris Johnson said Jingye's investment was "a welcome boost that will not just secure thousands of jobs, but ensure British Steel continues to prosper".
"We look forward to working with Jingye as they bring forward their investment plans, which have the potential to transform the business and secure a sustainable future," commented Roy Rickhuss, general secretary of the steel workers' trade union Community.