China’s Jingye Group set to buy British Steel

LONDON (AFP) – British Steel was set to announce a rescue deal by Chinese industrial giant Jingye Group, a source close to the matter told AFP.

Jingye’s spokeswoman earlier confirmed that the Chinese group’s chairman was in Britain for talks.

Reports said Jingye would pay GBP70 million (USD90 million) for British Steel which collapsed into liquidation in May.

“An announcement is expected today,” the source told AFP.

Turkish military fund OYAK last month pulled out of a deal to rescue British Steel, whose owners Greybull Capital had blamed Brexit for its financial collapse.

The European Steel Association has meanwhile urged the European Union (EU) to help the bloc’s struggling sector, which it said has been swamped by cheap steel from Asia since the United States (US) imposed import tariffs in 2018.

Although it did not take the steel producer into state ownership, the United Kingdom (UK) government said in May that it would keep paying staff wages in the hope that a buyer could be found.

Some 5,000 people are employed by British Steel and an estimated 20,000 more have links to the firm’s supply chain.

A total of 4,000 British Steel staff work in the UK, with an additional 1,000 based in France and the Netherlands.

“If this (rescue) is confirmed, then we welcome this positive step towards securing British Steel under new ownership,” said a spokesman for the UK-based Community trade union.

Greybull Capital created British Steel, a maker of long steel products, in 2016 after snapping up assets from Tata Steel.

Long steel products include plates, rails for railways, sections used in construction, and wire rod. The latter can be used as steel rope for infrastructure like suspension bridges or filaments for car tyres to give rigidity.