News ID: 264759
Published: 1004 GMT January 24, 2020

Unions agree terms over sale of British Steel to Chinese firm Jingye

Unions agree terms over sale of British Steel to Chinese firm Jingye
The British Steel plant in Scunthorpe, an industrial town in Lincolnshire, the UK. The steelmaker collapsed into insolvency in May 2019. (LINDSEY PARNABY/AFP/GETTY IMAGES)

British Steel is a step closer to being rescued by Chinese industrial firm Jingye, after a deal was agreed with trade unions wary of the impact on jobs and conditions.

Workers’ representatives and executives from the Chinese company, led by former communist party official Li Ganpo, are understood to have shaken hands about steelworkers’ future terms of employment, the Guardian reported.

The government, which has provided an indemnity to fund the operation of a business reportedly losing up to £1 million a day, is determined to complete a sale that could save more than 4,000 jobs by the end of February.

If a sale is completed close to the deadline, it will have taken more than nine months since British Steel’s collapse into insolvency to find a buyer.

Backing from trade unions, first reported by the Financial Times and confirmed by sources close to the discussions, removes one potential obstacle standing in the way.

Jingye still needs to reach agreement with suppliers, while the French state has to approve the sale of the company’s plant in Hayange, near the border with Luxembourg.

The Guardian revealed earlier this week that the government has lined up Turkey’s Cengiz Holdings, led by President Erodğan’s ally Mehmet Cengiz, as a potential fallback option.

But Jingye remains in pole position after signing a deal late last year to buy the company for about £50 million and promising to invest about £1.2 billion to restore it to former glories.

Despite the pledge, the takeover is expected to result in some redundancies, adding more job cuts to a steel sector already suffering contraction elsewhere.

Trade unions will now write to their members and ask whether they are willing to accept the terms on offer from Jingye.

A spokesperson for the trade union Community said it could not comment until it has spoken to its members.

The Guardian has approached Jingye for comment. The Official Receiver, a government employee managing the sale in tandem with accountancy firm EY, declined to comment.

Security Key:
Captcha refresh
Page Generated in 0/7369 sec