Chinese firm in talks over '£70m deal' to buy British Steel

Tom Belger
Finance and policy reporter
Workers leaving the steelworks plant in Scunthorpe earlier this year. Photo: PA

A Chinese firm is in talks over buying up British Steel, raising fresh hopes of saving thousands of jobs.

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

The BBC reported a £70m rescue deal had been agreed in principle, but a spokeswoman for the potential buyer told Reuters the deal had not been finalised and gave few further details.

It comes after a troubled few years for the UK firm, which is thought to produce around a third of the steel made in Britain.

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Its main plant is in Scunthorpe and Teesside, where it employs an estimated 4,000 people, but thousands more at other firms are reliant on the supply chain.

High energy costs, fierce Chinese competition, global overproduction and a lack of investment and state support have all been blamed for the challenges facing the company and its competitors in the UK.

British Steel was forced into compulsory liquidation in May. The Turkish army’s pension fund Oyak reached a provisional deal in August, but a deadline for exclusive talks came and went without agreement.

The UK government is reported by the BBC to be planning to help through loan guarantees and other financial backing.

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