A deal with Chinese firm Jingye to save British Steel will be finalised next week – saving around 3,200 UK jobs including hundreds on Teesside.
Under the terms of the sale, it is understood Jingye Group will take over the running of British Steel’s Teesside Beam Mill, based near Redcar, and a special profiles factory in Skinningrove, east Cleveland.
Jingye bosses say confirmation of the deal will unlock a £1.2 billion modernisation investment.
Jingye’s deal comes after British Steel – founded when Tata Steel sold its Long Products division to investor Greybull Capital – collapsed into compulsory liquidation last year.
Jingye Group chairman Li Ganpo was pictured on Teesside last November (above) after Jingye said it had exchanged contracts and reached an agreement to acquire certain assets of British Steel.
Greybull Capital had paid Indian company Tata a nominal £1 for its Long Products division.
After setting out ambitious targets for its future and securing a number of high-profile contracts, the company collapsed into liquidation last year, with a government-appointed official receiver overseeing operations ever since.
A steelmaking subsidiary of the Turkish military pension fund, Ataer Holdings, had been favourite to acquire the business before talks ended in October.
Responding to the news that the purchase of British Steel by Jingye has been conditionally completed, Northern Powerhouse minister Simon Clarke, MP for Middlesbrough South and East Cleveland, said: “This is hugely important news for our area.
“British Steel is an anchor employer in East Cleveland and represents a national asset.
“I pay tribute to all the workforce at Skinningrove and Lackenby, who throughout a very difficult time have behaved with huge dignity and professionalism.
“The government has worked incredibly hard alongside them to ensure the company has been able to keep trading over the last nine months and keep all options for a successful sale open.
“I am very conscious that while this news will be a huge relief for many workers and their families, there will be some associated job losses and this part of the process will be both sensitive and challenging.
“I hope as many as these as possible can take the form of voluntary redundancy, and know the expert DWP teams we have in our area will be on hand to offer every possible support – as will I.”
Tees Valley mayor Ben Houchen said: “We’ve been working flat out with Jingye for almost a year now and I am confident that a deal will be finalised in the coming days, securing many hundreds of jobs on Teesside.
“It is important to thank everyone who has been involved in getting this deal over the line, including all the workers at British Steel who have had to work through the uncertainty, the Government and the trade unions. It shows what can be done when we work together with the best interests of our region at the heart.
“Following the meetings I have had with Jingye, I am confident of a successful future for British Steel. And because we have struck a deal with SSI to take control of the former Redcar steelworks, we will develop a state-of-the-art Electric Arc Furnace within three years and we will provide good quality, well-paid jobs for local people when steelmaking returns to Teesside.
“This is just the start for the return of steel on Teesside. We have the building blocks in place and we’re making great progress as an area. We cannot afford to go back to square one when we’re securing the investment that is creating the jobs local people need and deserve.”