Wednesday, September 27News That Matters

Hundreds of jobs saved as British Steel unit sold

Hundreds of jobs at a British Steel subsidiary will be saved on Friday when a French engineering giant confirms the acquisition of TSP Projects, an infrastructure design consultancy.

Sky News has learnt that Systra, which has been engaged in talks to buy TSP for three months, has clinched a deal to buy the business, along with its £70m-plus pension liabilities.

The agreement is expected to be announced by Systra and the Official Receiver, which has been managing British Steel since it collapsed into compulsory liquidation in May.

A much larger transaction involving the sale of British Steel’s wider business, including its vast steelworks in Scunthorpe, remains subject to several weeks of due diligence by Ataer Holding, a subsidiary of Turkey’s military pension fund.

Confirmation of the deal between Systra and TSP will make it the first British Steel division to be sold to new owners since the group’s collapse in the wake of a government decision not to provide further state funding.

Sky News revealed last week that the sale of TSP was being held up by the need for a secured lender to agree to the transaction.

The lender, PNC, agreed to do so earlier this week, according to insiders.

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The sale safeguards the interests of roughly 500 pension scheme members and 400 TSP employees, many of whom are based at its York headquarters.

TSP has contracts to work on railway systems at Gatwick Airport‎ and broader infrastructure design in aviation, construction, energy and security.

Its biggest clients include Network Rail, Siemens and Costain.

Systra is owned by the French state railway SNCF, RATP and a consortium of French banks.

The company counts Andrew McNaughton, the former chief executive of Balfour Beatty, among its top management.

Its attempt to buy TSP Projects has drawn the attention of the UK’s Pensions Regulator because of the roughly £70m deficit in its retirement scheme.

British Steel plant in Scunthorpe
Image: Ministers signed off a support package to aid Ataer’s efforts to buy British Steel

TSP Projects’ pension scheme has only 14 active members, about 400 deferred members and 133 members who are receiving pensions from the company, according to information circulated to bidders.

British Steel’s collapse into insolvency came just weeks after Greg Clark, the then business secretary, handed a £120m government loan to the company to help it meet its obligations under an EU scheme for industrial polluters.

A further support package was due to be given to British Steel but was withdrawn at the 11th hour amid concerns that it would breach state aid rules.

Sky News revealed earlier this month that ministers had signed off a support package worth around £300m to aid Ataer’s efforts to buy British Steel.

Systra could not be reached for comment.

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