British Steel Turkish army fund takeover in danger of collapse

The Guardian Finance 3 weeks ago

The proposed takeover of British Steel by Turkey’s military pension fund is in danger of collapse, after the government said it was preparing to open discussions with rival bidders.

Ataer Holdings, a division of Turkish army pension fund Oyak, has been in exclusive talks with the official receiver, the government employee overseeing a sale it was hoped could save more than 4,500 jobs and the Scunthorpe steelworks.

But a ten-week exclusivity period ends on Thursday, amid reports that Ataer’s interest has stalled because of difficulties in convincing British Steel’s suppliers to accept lower prices for goods and services.

“While discussions with Ataer are continuing, discussions with other parties who have expressed continued and renewed interest in acquiring the whole British Steel business will now be possible,” said David Chapman, the official receiver.

“I have instructed the special managers [the accountancy firm EY] to engage with these additional interested parties.

“Diligence team members from these parties are expected to visit the company’s sites over the coming days and weeks. Meanwhile Ataer remain very much interested in acquiring the business and we remain in detailed discussions with them to conclude a sale.”

Liberty House, run by the steel magnate Sanjeev Gupta, is expected to rekindle its interest, while the Chinese firm Jingye is also thought to be waiting in the wings.

The Guardian has approached Ataer and its financial advisers for comment.

Oyak’s suitability as a buyer has been called into question in recent weeks, after trade union officials and MPs said they were concerned about its connections to the army and the government of Turkey because of its incursion into northern Syria.

The Guardian has previously revealed that Oyak was accused of corruption by a parliamentary inquiry in Turkey and that it planned to move a chemicals firm it owns out of the UK, at the cost of dozens of jobs.

The collapse of British Steel earlier this year threatened the future of the Scunthorpe site, one of the last two blast furnace steelworks in the UK.

The government is understood to have offered buyers of British Steel grants, indemnities and loans worth £300m to support a deal that can save the site.

The Insolvency Service is funding the company’s operations in the meantime, raising the pressure for a buyer to be found because of the mounting cost to taxpayers.

“I remain focused on achieving a sale of the business and assets of British Steel as quickly as possible, to achieve the best possible outcome for the company’s creditors,” said Chapman.

“The conclusion of the exclusivity period allows us to consider all of the options available at this point in the process. I would like to thank the team at British Steel for their continued support and hard work during this period of uncertainty.”


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