Chinese steelmaker Jingye Group completed its purchase of British Steel on Monday.
As reported by Davis Index previously, the sale was slated to close on March 9. Jingye is investing £1.2 billion ($1.6bn) in the company to elevate its margins to the industry average in half a decade. The money will see an electric arc furnace developed in Teesside, a 250MW power plant built to support the Scunthorpe plant, which promises to be a third more efficient than the current plant, developing rolling mills to produce high-quality steel products, a new rebar line, and improving the current rail mill.
The acquisition also secures 3,200 jobs that previously hung in the balance amid British Steel’s uncertain future and excludes the British steelmaker’s France Rail’s (Hayange) assets. The French government previously protested the Jingye’s planned acquisition of British Steel.
British Steel, previously owned by Greybull Capital, produced 2.8mn mt of steel in 2018 and has an annual steelmaking capacity of 4.5mn mt. The company produces construction steel, rail, wire rod, and special profiles. British Steel entered administration overview in May 2019. The company’s Hayange plant has an annual capacity of 370,000mt of 100 different rail profiles in more than 30 steel grades from 6-108 meters. Hayange has a five-year agreement to supply France’s national railway company with 120,000mt of rails per year until 2021.