A Chinese industrial giant is set to come to the rescue of British Steel within days, buying out its embattled Scunthorpe plant and potentially saving 4,000 jobs, it has been reported.
After talks with a prospective Turkish buyer collapsed, the Jingye Group has become the leading contender to buy British Steel out of liquidation, with a buyout bid worth a reported £70 million on the table.
Jingye is also set to sweeten the offer with the promise it can also access up to £300 million in loans, indemnities and grants to back its plan to boost production at the plant by 10%.
Staff at the Scunthorpe facility have been told in an email that contracts between British Steel and Jingye have been exchanged, the Guardian reported.
The news comes after talks stalled between the steelmaker and Ataer. The Turkish firm is said to have fallen to third place in the bidding, also behind steel baron Sanjeev Gupta, who owns the UK-based Liberty House group.
Nic Dakin, the Labour candidate for Scunthorpe, said: “The workforce at British Steel have done an outstanding job continuing to make and sell steel through this difficult few months.
“It looks as if we’re coming to a point where a new owner may well be determined and that would be very good news for the business and the communities that are around it.”
Unions welcome British Steel rescue by Jingye Group
Unions have welcomed an expected announcement that a rescue deal has been struck with British Steel which could save up to 4,000 jobs.
British Steel, which had been in talks with Turkish firm Ataer, now appears poised to secure a £70 million deal with the Chinese industrial giant Jingye within days.
A spokesman for the Community trade union said: “If this is confirmed, then we welcome this positive step towards securing British Steel under new ownership.
“The fact that there has been ongoing interest from both Ataer and now Jingye, rightly demonstrates that potential buyers believe that British Steel can have a sustainable future.
“Any new owner would not just be acquiring a steel business, they would be taking on a dedicated and skilled workforce, who even through the uncertainty of recent months have been breaking production records to give the business a chance.
“In the meantime, everyone needs to remain focused on securing a viable deal to save our steel.”
Staff at the Scunthorpe facility have been told in an email that contracts between British Steel and Jingye have been exchanged, the Guardian reported.
Jingye is also set to sweeten the offer with the promise it can also access up to £300 million in loans, indemnities and grants to back its plan to boost production at the plant by 10%.
The GMB union, who met a senior team of Jingye officials in Scunthorpe on October 30, said they were treating the proposed sale with “cautious optimism”.
GMB national officer Ross Murdoch said: “We were impressed with the passion and enthusiasm from the Jingye team. However due diligence on this sale was completed very quickly and the devil will be in the detail.
“As such we will seek an urgent meeting with the Jingye group to discuss their precise strategy.
“GMB’s position is, the new owner takes on the whole workforce on existing terms.”
Ataer is said to have fallen to third place in the bidding, also behind steel baron Sanjeev Gupta, who owns the UK-based Liberty House group.
Nic Dakin, the Labour candidate for Scunthorpe, said: “The workforce at British Steel have done an outstanding job continuing to make and sell steel through these difficult few months.
“It looks as if we’re coming to a point where a new owner may well be determined and that would be very good news for the business and the communities that are around it.”
Tees Valley’s Tory elected mayor, Ben Houchen, said the news that Teesside jobs have been secured was “wonderful”.
The mayor, who met the prospective new owner last week, said: “I’m delighted for all of those who work at British Steel who now know that their job is secure.
“I couldn’t imagine a better early Christmas present for all of those workers who have had to deal with the uncertainty.
“What’s even more exciting is that the new owners have pledged to increase production and, following my meeting with the new owner last week, I’m confident the future is bright for British Steel.
“It’s been humbling to work with British Steel, Government and the unions to secure this deal and it shows what we can do when we pull together.”
Over 620,000 manufacturing jobs lost in past 12 years
The GMB union said its research showed a fall of 17 per cent since 2007, when the UK supported 3.5 million permanent and temporary manufacturing jobs.
By 2019 that figure had fallen to 2.9 million, said the union.
National officer Jude Brimble said: “It’s a scandal the Conservatives are willing to gamble away manufacturing’s future.
“Under their watch, vital contracts are being sent overseas at the expense of industries including shipbuilding and renewables manufacturing.
“The absence of any kind of industrial strategy, coupled with a complete lack of investment is robbing a whole generation of their futures.
“This has not happened by chance. There are thousands of jobs that could be created in sustainable energy and renewables, but this government have failed to invest and let our contracts go overseas.”
RELATED: EU backs German government’s move to keep Thomas Cook subsidiary flying
Survey reveals extent of companies on both sides of Irish border cancelling business ahead of Brexit
UK economy would be 5% bigger under Labour than a Conservative government by 2022
