British Steel a step closer to rescue deal after approval in China

British Steel is a step closer to a rescue deal after Chinese bidder Jingye received approval from regional authorities in China.

Jingye had to win approval from two Government-backed organisations in the Chinese province of Hebei, where it is based: the Hebei Bureau of Commerce and the Hebei Development and Reform Commission.

The Chinese firm will now seek a deal with the unions as well as clearance from the French Government. One of the steel plant produces rails for state-owned French train operator SNCF, and France can veto changes in ownership of strategic industrial assets.

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The investment arm of Turkey’s military pension fund, Ataer Holding, was selected in August as the preferred bidder for the collapsed steel company.

Ataer was given a 10-week period in which the Government would not hold talks with other potential buyers. That period of exclusivity ended in October, after which other potential buy-out plans were considered including Jingye Group.

It is understood the Jingye will pay roughly £50 million for British Steel but will also be able to tap into a £300 million taxpayer-funded support package to aid the deal.

The company has put forward a £1.2 billion investment plan to ramp up production and cut costs.

Jingye will now meet with unions over the next few weeks to put forward plans for investment and discuss employment contracts.