British Steel in exclusive talks with Turkish pension fund to save 5,000 jobs
The Official Receiver will now look to conclude a sale of the insolvent business in the coming weeks to Turkey’s armed forces pension fund.
The investment division of Turkey’s armed forces pension fund is the preferred bidder for British Steel, the Government’s Insolvency Service has revealed.
Investment vehicle Ataer Holding will now be given several weeks to allow its advisers to comb through British Steel’s business before any deal is made official.
The Official Receiver has entered exclusive talks with Oyak, which controls Ataer, after revealing he received several approaches for the business.
He said: “Following discussions with a number of potential purchasers for the British Steel group over the past few weeks I am pleased to say I have now received an acceptable offer from Ataer Holdings AS for the purchase of the whole business and I am now focusing on finalising the sale.
“I will be looking to conclude this process in the coming weeks, during which time British Steel continues to trade and supply its customers as normal. I would like to thank all employees, suppliers and customers for their continued support which has been essential to get to this point.”
The news is expected to be welcomed by British Steel’s 5,000 staff, including 4,000 at its plant in Scunthorpe, and a further 700 on Teesside in north-east England.
Harish Patel, national officer for steel at the Unite union, said: “The overwhelming feeling of the 5,000 workers at British Steel is one of relief.”
But GMB national officer Ross Murdoch warned that its members were still “staring redundancy in the face” due to the continuing uncertainty.
“This dedicated and loyal workforce must not be an afterthought amidst all of the speculation,” he said.
The company is also indirectly responsible for 20,000 workers in the supply chain and produces around 2.5 million tonnes of steel a year.
Ataer, which invests funds for the Turkish Armed Forces Assistance Fund – or Oyak – already owns nearly 50% of Turkey’s biggest steel producer, Erdemir.
However, there has been criticism that the company is too close to the Turkish government and lacks accountability.
British Steel was put into compulsory liquidation in May after talks between previous owners Greybull and the Government collapsed, leading the business to be run by the Official Receiver.
The steel industry is ready to invest in its future in the UK, all it requires is a partnership with the Government to help deliver a level playing field that can unlock its potential Gareth Stace, UK Steel director general
Previous reports had suggested that Oyak wants to buy British Steel as the first step to buying up steel assets across the world.
Anna Turley, Labour MP for Redcar and Secretary of the All Party Parliamentary Group on Steel, said: “No one wanted to see a repeat of the disaster in 2015 and to their credit ministers have stepped up this time, including with the support package for this sale.
“This is great news for British Steel and the thousands of workers and their families, including 700 on Teesside, who can now have some confidence that their industry has a future.
“Whilst the coming weeks will be crucial for hammering out the detail and successfully completing a sale, the outlook is now extremely positive.
“I’ll be looking closely at the detail of their bid to ensure it delivers the investment in assets, people and innovation that we need.”
Gareth Stace, UK Steel director general, welcomed the news and warned the loss of British Steel would have hit manufacturing hard.
He added: “The UK steel sector has a potentially bright future, underpinned by increasing UK and global steel demand for our products, but the Government must recognise the need to address the business environment in the UK which currently undermines our competitiveness.
“The steel industry is ready to invest in its future in the UK, all it requires is a partnership with the Government to help deliver a level playing field that can unlock its potential.”