Chinese company 'close to buying British Steel'

China's Jingye Group has confirmed it will buy and modernize the United Kingdom's beleaguered British Steel.

The deal should complete on Monday.

According to unconfirmed reports, Jingye is going to pay 70 million pounds ($89 million) for the once state-owned steelmaker, says it will invest 1.2 billion pounds on updating the company.

It says the deal will save 3,200 UK jobs.

The BBC quoted Li Huiming, Jingye's chief executive, as saying the deal marks a "new chapter in British steelmaking".

The union Community, which represents many UK steel workers, welcomed the news but lamented that around 400 people will still lose their jobs.

The UK government's Insolvency Service has controlled British Steel since it became insolvent in May. The company had been running at a loss of around 1 million pounds a day.

Li said: "I want to thank everyone who has been involved in making this deal happen, including British Steel employees, the unions, and the British government. We will not misplace the trust that they have placed in us."

Roy Rickhuss, general secretary of Community, said he was looking forward to working with Jingye.

"There is still plenty of work to be done in the coming weeks," he said. "Not least supporting those who did not receive job offers… We argued that everyone should be taken over into the new company and we are continuing to make the case on behalf of our members for the maximum number of employees to be transferred to the new business."

Li noted that the steelworks his company is buying have existed for around 150 years and said "we are excited about what we can collectively achieve at British Steel to build a successful future for many years to come".

The Guardian noted that British Steel's Hayange plant, in northeastern France, is not part of the agreed deal. It was taken off the table when, in January, the French government declared it a strategic national asset.

Li said negotiations will continue to include that plant in a future deal.

Alok Sharma, the UK's business secretary, said: "Jingye has reached a significant milestone in securing a deal for the future of British Steel. Work continues towards completing the sale, which will give certainty to British Steel's dedicated and talented workforce."

The deal involves Jingye buying British Steel's steelworks in Scunthorpe and its mills in Teesside, as well as subsidiary companies FN Steel and TSP Engineering.

Sky News noted that the company, which is descended from an entity that employed 310,000 people in its 1971 heyday, had a UK workforce of 4,000 at the time of its collapse last year.