Chinese firm Jingye has come to the rescue of British Steel, with a takeover offer for the troubled firm, which has been kept running by the UK government via an Official Receiver since going into liquidation in May.
Jingye Group chairman Li Ganpo said that the company would invest 1.2 billion pounds (US$1.54 billion) over the next decade in upgrading plants and machinery and improving efficiency.
UK Business Minister Andrea Leadsom said the news "was a positive step forward".
The Official Receiver and Special Managers from EY, said in a statement that contracts have been entered into with Jingye Steel (UK) Ltd and Jingye Steel (UK) Holding Ltd to acquire the business and assets of British Steel Limited, which is currently in liquidation.
The deal includes the steelworks at Scunthorpe and UK mills, and the subsidiary businesses of FN Steel, British Steel France and TSP Engineering. It is anticipated that the shares owned by BSL in Redcar Bulk Terminal Limited will also be included in the sale.
Completion of the contract is conditional on a number of matters, including the requisite regulatory approvals and certain employee consultation procedures. The statement said that 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.
Jingye is headquartered in Hebei Province.