Chinese steelmaker Jingye in £70 million British Steel rescue deal

Steelworkers hold placards saying 'save our steel'

British Steel has rescued by Chinese firm Jingye potentially saving up to 4,000 jobs, the Insolvency Service has said.

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 United Kingdom company to keep thousands of jobs.

Jingye Group confirmed it has begun negotiations with the loss-making steel firm, which has been kept afloat by the United Kingdom government since it collapsed into administration in May.

British Steel employs about 5,000 people directly in the United Kingdom in Scunthorpe, Skinningrove and Redcar, as well supporting thousands of roles in its supply chains.

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 per cent.

According to Gareth Stace, director-general of UK Steel, British Steel is a significant asset to the United Kingdom and accounts for one third of UK steel production, mainly from its Scunthorpe site.

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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 employs 23,500 people and has interests in hotels, tourism and property.

The UK industry has been struggling for a number of years amid claims that China has been flooding the market with cheap steel.

GMB national officer Ross Murdoch said: "We were impressed with the passion and enthusiasm from the Jingye team".

"I couldn't imagine a better early Christmas present for all of those workers who have had to deal with the uncertainty".

However, hopes that the deal could be completed faded last month when the Official Receiver to British Steel said the parties had failed to agree terms.

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