A man works at a steel plant in Tangshan, North China's Hebei Province. File photo: VCG

Chinese private enterprise Jingye Group has reached an agreement to acquire the bankrupt company British Steel, together with investment over the next 10 years, media reports said on Tuesday.

"Chairman Li Ganpo and senior executives visited the British steel company and made on-the-spot investigations last week," Yang Hongxian, head of publicity of the Jingye Group, confirmed to the Global Times on Tuesday.

As to the value of the deal and subsequent investment, Yang said that  "Acquisition-related procedures have not been completed and there is still uncertainty."

But the UK government announced on its website on Monday that a sales contract has been entered into with Jingye Group to acquire the business and assets of British Steel, including the steelworks at Scunthorpe, UK mills and shares of its subsidiaries, citing the Official Receiver and special managers from Ernst & Young managing the deal.

Tian Yun, vice director of the Beijing Economic Operation Association, said the takeover is an advantage for the UK. 

"Britain got outside capital to save the steel industry and many jobs. There is no reason for the UK to refuse a Chinese takeover of a bankrupt British company," Tian told the Global Times on Tuesday.

British Steel, the second-biggest steel group in UK, declared bankruptcy in May after being denied government aid. The company employed 4,000 people at the time. 

"Shareholders and creditors, not to mention the workers, would not have much to gain from a bankruptcy. Those 4,000 jobs saved, plus jobs in the upper and lower reaches of the industrial chain, will be good for everyone," said Tian.

Employees of Chinese industrial giant Jingye Group were celebrating in Mulligans Sports Bar on Sunday night when they made the announcement of the acquisition, local media Grimsby Telegraph reported on Tuesday, saying the act helps secure more than 3,000 jobs in the town of Scunthorpe, where the plants of British Steel are located.

Tian questioned the strategic significance for Jingye Group in the deal, especially given that the global economy is waning and new drivers of economic growth are in Southeast Asia.

"The UK is a declining market as demand shrinks in Europe and traditional manufacturing in the US is uncompetitive," Tian added.

Li said that Jingye, a young company with large ambitions, has long admired British Steel and appreciates its illustrious heritage, and Jingye will transform the business together with the workers, the Grimsby Telegraph reported.

"I think the British authorities agreed to the deal because they have a political consideration, the general election in December. The rescue of jobs is an achievement," a Chinese source close to the matter told the Global Times on condition of anonymity.

Jingye Group is a multi-industrial company with 23,500 employees, mainly specialized in iron and steel, according to the company's website. It also engages in powder metallurgy, 3D printing, tourism, hotels and real estate. 

Total sales reached 90.1 billion yuan ($12.9 billion) in 2018, with taxable income of 3.35 billion yuan.