Jingye Group, a leading Chinese steelmaker, today heralded a successful future for British Steel after completing the acquisition of the company’s UK and Netherlands assets from the Official Receiver.

Jingye has pledged to invest £1.2 billion to place the business on a more competitive and sustainable footing. Jingye plans to return the company to industry comparable margins within five years.

Initiatives include:

• The development of an Electric Arc Furnace in Teesside
• The construction of a new 250MW power plant to serve the Scunthorpe site. The new plant is expected to be around a third more efficient than that it replaces
• Investment in the rolling mills to produce high-quality steel products to optimize the product portfolio
• Build a new rebar line
• Enhance the current rail mill

The completion secures the future of approximately 3,200 jobs and follows the agreement of new terms with customers and suppliers.

Jingye Group CEO, Li Huiming, said: “It has not been an easy journey since we first announced our intentions in November but the longer I have spent in Scunthorpe, the more I have come to believe in the successful future of these steelworks and the employees that have made them famous throughout the world. Together, we can forge a new partnership that will mark the beginning of a new illustrious chapter in the history of British steelmaking.”

British Steel CEO, Ron Deelen, said: “This is a momentous day for our business, and I’d like to thank everyone for their dedication during a challenging year. I’m confident we’ll seize the incredible opportunity Jingye have given us to build on 150 years of heritage, and further cement British Steel’s reputation as a manufacturer of world class steel.”

Business Secretary, Alok Sharma, said: “The sale of British Steel represents an important vote of confidence in the UK’s steel industry. It also marks the start of a new era for those regions that have built their livelihoods around industrial steel production.

“I would like to pay tribute to everyone who has been involved in getting this deal over the line, in particular to British Steel’s workforce for whom I recognise the uncertainty will have been challenging.

“I also want to reassure British Steel employees who may be facing redundancy that we are mobilising all available resources to give immediate on the ground support and advice to those affected.”

As previously indicated, assets included in the transaction include British Steel’s steelworks at Scunthorpe and UK mills at Teesside Beam Mill and Skinningrove, as well as subsidiary businesses FN Steel in the Netherlands and TSP Engineering. It does not include British Steel’s French operations at Hayange, the acquisition of which is still subject to further negotiations with the relevant authorities in France and is hoped to be concluded separately.