British Steel is to be rescued by Chinese company Jingye following several weeks of discussions with a number of interested parties.

The news comes after the steel company, which owns the steelworks at Scunthorpe and directly employs around 5,000 people, collapsed into insolvency in May after months of financial pressure.

The Official Receiver has accepted a bid from the Chinese firm, marking an important step towards securing steelmaking operations at British Steel’s sites in the UK.

It confirmed an Asset Purchase Agreement has been signed by Jingye to buy the business and assets of British Steel, including the steelworks at Scunthorpe, UK mills and shares of FN Steel BV, British Steel France Rail SAS and TSP Engineering.

In addition, the sale includes the shares owned by BSL in Redcar Bulk Terminal.

The Official Receiver said in a statement: “Completion of the contract is conditional on a number of matters, including gaining the necessary regulatory approvals. 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. Support from employees, suppliers and customers since the liquidation has been a critical factor in achieving this outcome.”