British Steel may secure a £70m rescue package from Chinese steelmaker Jingye Group, who employs over 22,000 staff and exports steel products globally, helping the troubled UK company to keep thousands of jobs.
The Official Receiver, who has been managing the administration, is expected to announce the decision later today.
— Jefferson Group (@Jefferson_MFG) November 11, 2019
Over 4,000 employees and a further 20,000 jobs in British Steel's supply chain rely on the deal, including its plants in Scunthrope and Lincolnshire. The proposal may also be seen as a major step towards saving Britain's steel manufacturing base in the UK, which has declined in recent years.
Director of the Northern Powerhouse Partnership, Henri Murison, said that a rescue deal from the Chinese would be "very welcome news".
It was time to embrace cooperation with Beijing, who is working with countries worldwide via the Belt and Road global development strategy, he said as quoted by Reuters, adding that Chinese firms have also bought a steel plant in Serbia and the country's only copper mine.
— Henri Murison (@henrimurison) November 11, 2019
The news comes after talks with Ataer Holdings stalled in October, following intense weeks-long negotiations which began in August to formalise the deal, where the Turkish military pension fund offered a nearly £1bn lifeline alongside the UK government's £300m in commercial loans, grants and other sources of funding.
The Official Receiver said at the time: “While discussions with Ataer are continuing, discussions with other parties who have expressed continued and renewed interest in acquiring the whole British Steel business will now be possible.
"Meanwhile Ataer remain very much interested in acquiring the business and we remain in detailed discussions with them to conclude a sale," the OR added.
British Steel was ordered by the UK High Court to undergo "compulsory liquidation" in late May after failing to receive a £30m in emergency funds, and was temporarily managed by administration firm Ernest and Young (EY) during its insolvency.
The UK's second-largest steelmaker was owned by Greybull Capital, who also managed Tata Steel and Monarch Airlines, after the private investment company paid Tata £1 to acquire British Steel in 2016. But Monarch Airlines fell into administration in 2017, despite seeking similar bailouts.