British Steel rescued in buyout by Chinese firm

British Steel has been saved in a rescue deal by Chinese firm Jingye saving up to 4,000 jobs, the Insolvency Service has confirmed.

The British Steel plant at Scunthorpe

Staff at the Scunthorpe facility had earlier been told in an email that contracts between British Steel and Jingye had been exchanged.

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.

GMB national officer Ross Murdoch said: "We were impressed with the passion and enthusiasm from the Jingye team. However due diligence on this sale was completed very quickly and the devil will be in the detail.

"As such we will seek an urgent meeting with the Jingye group to discuss their precise strategy.

"GMB's position is, the new owner takes on the whole workforce on existing terms."

Nic Dakin, the Labour candidate for Scunthorpe, said: "The workforce at British Steel have done an outstanding job continuing to make and sell steel through these difficult few months.

"It looks as if we're coming to a point where a new owner may well be determined and that would be very good news for the business and the communities that are around it."

The mayor, who met the prospective new owner last week, said: "I'm delighted for all of those who work at British Steel who now know that their job is secure.

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

"What's even more exciting is that the new owners have pledged to increase production and, following my meeting with the new owner last week, I'm confident the future is bright for British Steel.

"It's been humbling to work with British Steel, Government and the unions to secure this deal and it shows what we can do when we pull together."

In a statement, the Insolvency Service said: "The Official Receiver and Special Managers from EY can confirm that a sales contract has been entered into with Jingye Steel (UK) Ltd and Jingye Steel (UK) Holding Ltd (together, Jingye), to acquire the business and assets of British Steel Limited (BSL), including the steelworks at Scunthorpe, UK mills and shares of FN Steel BV, British Steel France Rail SAS and TSP Engineering.

"The sale also includes the shares owned by BSL in Redcar Bulk Terminal Limited.

"Completion of the contract is conditional on a number of matters, including gaining the necessary regulatory approvals. The parties are working together to conclude a sale as soon as reasonably practicable.

"The business will continue to trade as normal during the period between exchange and completion. Support from employees, suppliers and customers since the liquidation has been a critical factor in achieving this outcome."