Revealed: China's Xinwei is Doncasters bidder

A Chinese tycoon who once ranked among the world's richest men is the mystery figure behind a £1bn-plus takeover bid for Doncasters Group, one of the UK's oldest engineering companies.

Sky News has learnt that Beijing Xinwei, a telecoms technology provider, is in detailed talks to buy Doncasters in a deal that has raised security concerns about the sale of the British company's defence operations.

Xinwei is headed by Wang Jing, a billionaire who in 2015 was ranked by Forbes magazine among the world's 200 wealthiest people.

Sharp (Swiss: SHA.SW - news) falls in Chinese equity markets later that year, and the pledging of a multibillion dollar stake in Xinwei as collateral were responsible for a decline in his paper fortune of more than 80%, Forbes said.

The reasons for Mr Wang's interest in Doncasters are unclear, and people aware of Xinwei's talks to buy the British company cautioned that there was no certainty that a deal would be completed.

Sky News revealed last week that Doncasters' defence unit was expected to be separated ahead of a Chinese takeover amid concerns about the ownership of a unit which produces missile fins and components for launch systems.

It is unclear whether those issues have been raised by the Ministry of Defence or other parts of the UK Government about the deal.

Ministers previously intervened to prevent a Chinese takeover of Sheffield Forgemasters, which makes parts for the UK's fleet of nuclear submarines.

Doncasters, which was founded in 1778 when Daniel Doncaster set up a hand-tool casting business in Sheffield, counts Boeing (NYSE: BA - news) and Rolls Royce (LSE: RR.L - news) among the customers of its broader aerospace business, which accounts for the vast majority of its sales.

Doncasters' defence division accounts for less than 5% of group revenues, meaning that its separation is not material to the sale price, according to a person close to the company.

However, a separation of the unit is potentially complex because of systems and other issues, another source added.

A Chinese takeover of Doncasters could be signed within weeks of Theresa May's launch of an industrial strategy aimed at positioning the UK strongly to exploit emerging technologies.

A green paper published last week said little about the issue of foreign takeovers of British companies, an issue that has previously attracted the Prime Minister's attention.

A separate document on the issue relating to overseas ownership of critical national infrastructure is expected to be published by the end of March.

Midlands-based Doncasters specialises in working with metals and alloys that are difficult to shape, and employs more than 5,000 people.

It is expected to fetch well over £1bn from a sale, which is being handled by Goldman Sachs (NYSE: GS-PB - news) .

Blackstone (NYSE: BX - news) , Carlyle and Clayton Dubilier & Rice, three big private equity groups, have also examined bids for Doncasters, but sources said that Xinwei was now the only active party in talks with Dubai International Capital (DIC (Taiwan OTC: 1818.TWO - news) ), its current owner.

Doncasters has been part of the portfolio of DIC, a private investment vehicle of the emirate's ruling family which is now being wound down, since 2006.

In 2014, the British manufacturer made underlying pre-tax profit of about £136m, roughly flat on the previous year.

A Doncasters spokeswoman declined to comment.