Fresh doubts about British Steel as bid hopes fade

British Steel's Scunthorpe plant Image copyright Reuters

The government is ready to open talks with bidders for British Steel after failing to agree terms with the Turkish company granted exclusivity in August.

Turkey’s Ataer Holding had until Thursday to reach an agreement to buy the business, which includes the works in Scunthorpe.

Since May, British Steel has been kept running by the government as it seeks a buyer for the business.

Some 5,000 jobs are directly at risk and another 20,000 in the supply chain.

British Steel was put into compulsory liquidation in May after rescue talks with the government broke down.

The Official Receiver said on Wednesday that while discussions with Ataer were continuing, it was now possible to talk to other potential bidders.

Ataer owns nearly 50% of Erdemir, Turkey’s biggest steel producer, and is the investment vehicle of the Turkish Armed Forces Assistance Fund (known as Oyak), the pension fund for the country’s armed forces.

MPs have voiced concerns about Ataer’s links with the Turkish government following the country’s military crossing into Kurdish-held parts of Northern Syria.

The Official Receiver said: “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.

“I have instructed the ‘special managers’ [at accountants 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.”

‘Consider all options’

It is expected that Liberty House, run by businessman Sanjeev Gupta, is likely to rekindle its interest in buying British Steel.

Liberty House already owns facilities in Rotherham and Stocksbridge, both in South Yorkshire, and employs 5,500 people across some 30 sites in the UK.

Steve Turner, Unite assistant general secretary for manufacturing, said he had written to 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 to maintain customer, supplier and workforce confidence in a company which can have bright future,” Mr Turner said.

He said it was a “strategically important business” which provides 95% of the UK’s rail tracks and supplies other UK steelmakers with product.

Nic Dakin, the Labour MP for Scunthorpe, said he was in regular contact with the business secretary, trade unions and the British Steel special managers.

“The fundamentals of British Steel are unchanged. This is a strong business, which is reflected by the continued interest of a number of parties in buying British Steel. I am continuing to do everything I can to ensure that there is a successful outcome,” Mr Dakin said.

The Official Receiver said the focus was on achieving a sale as “quickly as possible”.

“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,” the Official Receiver said.


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