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British Steel has agreed with the Chinese company to save £ 70m

British site Steel ScunthorpeCopyright for images

British Steel is set to announce a bailout deal with China's Jingye Group, which could protect up to 4,000 jobs in the UK.

Jingye Group has agreed in principle to buy British Steel for £ 70m.

It is understood that the state will assist in the form of a loan loan and other financial support.

The British Steel Government has been running since May when the company went into liquidation.

In addition to employing 4,000 people at Scunthorpe and Teesside locations, British Steel supports an additional 20,000 jobs in the supply chain.

It is believed that although Jingye Group has promised to increase production, it has also warned that costs may need to be reduced.

The Chinese group is reportedly seeking to increase production at Scunthorpe from 2.5 million tonnes a year to more than three million.

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Since May, the company has been operating at a loss from an official payee – which is actually a private government agency.

The previous owners of British Steels, Greybull Capital, backed away saying Brexit concerns had reduced books for subsequent orders.

Turkish agreement

British Steel has been discussing the rescue with Ataer, a subsidiary of Turkey's Oyak state pension scheme.

Ataer signed a preliminary agreement to buy the company in August.

However, he hopes the deal could be faded last month when an official British Steel recipient said the parties failed to agree on the terms.

The UK industry has been struggling for many years amid claims that China has flooded the market with cheap steel.

This forced US President Donald Trump to impose a 25% trade tariff on steel imports from China and the EU, among others.

Jingye has 23,500 employees and, in addition to its major iron and iron manufacturing companies, also engages in hotels, tourism and property.

Most British Steel workers are employed by the Scunthorpe plant.

Chairman Jingye Li Ganpo recently visited British Steels and met with Scunthorpe MP Nic Dakin and Andrew Percy, Brigg and Goole constituency representatives.

Mr Percy told the Grimsby Telegraph that he had been given guarantees about the future of the company.

"They have assured us that if they make progress with this acquisition, they have every intention of investing in expanding production to serve the UK and Europe markets," he said.

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Inscription for the mediaBritish Steel is Scunthorpe's largest employer

Who is the Jingye Group?

The Chinese group Jingye specializes in iron and steel, but also deals with tourism, hotels and real estate.

It has 23,500 employees and a total registered assets of 39 billion. Yuana ($ 5.6 billion; $ 4.4 billion). According to its website, Jingye Group ranked 217th among the top 500 companies in China in 2019.

The company sells its products nationwide and exports them to more than 80 countries and regions.

Jingye's products have been used in major projects such as Beijing Daxing International Airport and the Shijiazhuang underground system.

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