British Steel: Rescue deal thrown into doubt as deadline looms

The Independent Finance 0 month ago

Doubts are emerging over a deal to buy British Steel out of liquidation, in a fresh blow to the thousands of workers whose jobs have been hanging in the balance since the company collapsed in May.

Ataer Holding, the investment arm of Turkey’s military pension fund Oyak, has been examining the steelmaker’s business and finances since August when it was picked as the preferred buyer, winning exclusive access to British Steel.

Oyak has said that if the due diligence is finalised successfully during the exclusivity period – which ends on Thursday – it will complete the purchase of British Steel by the end of this year.

But on Wednesday the official receiver, in charge of the steelmaker since May, said in a statement: “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.”

The statement continued: “Diligence team members from these parties are expected to visit the company’s sites over the coming days and weeks.”

On Tuesday, the Financial Times reported that the rescue deal is in danger of collapsing because some of British Steel’s biggest suppliers are refusing to accept price cuts. Citing people aware of the situation, the FT said Ataer has asked for cost reductions as a condition of any final bid to buy the firm.

Some of British Steel’s contracts were priced at “multiple” times the going market rates, one person familiar with the company told the FT.

A successful sale would be a relief to the steelmaker’s 5,000 workers, although Ataer has said it may cut a number of jobs at British Steel’s main plant in Scunthorpe, which employs 3,000 people.

The Unite union called on the government to guarantee its continued support for the steelmaker in order to facilitate the sale.

Steve Turner, assistant general secretary for manufacturing at Unite, said on Wednesday: “The future of 5,000 direct jobs across the UK and a further 20,000 in the supply chain depend on securing a long-term future for British Steel.

“Today I have written to the business secretary Andrea Leadsom requesting an urgent meeting. It is vital that the government continues to stand behind British Steel until the sale process is finalised.”

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