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Turkish fund eyes £900m British Steel revival‎ plan

The Turkish pension fund plotting a takeover of British Steel is preparing to commit close to £1bn to help fund the company’s revival.

Sky News has learnt that Ataer Holding, which is poised to enter a formal period of exclusive negotiations to buy British Steel this week, has drawn up a business plan that would involve approximately £900m of investment over several years.

The figure is in addition to a support package from the government – revealed by Sky News late last week – that could amount to £300m in the form of grants, indemnities and loans on commercial terms.

Ataer is a unit of Oyak, which looks after the pension pots of Turkey’s military personnel.

Insiders said that the Official Receiver (OR) was likely to announce as soon as Tuesday that Ataer was entering a six-to-eight week period within which to formalise a deal.

The existence of an investment programme worth up to £900m will reassure British Steel’s more than 4,000 workers, its unions and government ministers that the company has a realistic chance of long-term survival.

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It was unclear on Sunday, however, what period that investment figure related to.

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Further details of Ataer’s turnaround plans, or whether British Steel’s existing management team would be retained, were also unclear.

British Steel, whose largest manufacturing site is in Scunthorpe, collapsed into insolvency in May after the government opted not to provide a £30m to the company under its then-owner, Greybull Capital.

Roughly 20,000 more jobs in British Steel’s supply chain are dependent on the company.

Ataer, which has made no comment so far on its interest in entering the UK steel sector, is understood to be planning to pledge to produce “the greenest steel in Europe” if it succeeds with a takeover.

Insiders said the government funding signed off last week would not breach EU state aid rules.

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Ministers are also said to have settled on a remedy for the problem of EU carbon credits, which forced the company to seek an emergency £120m loan from the government in April.

The Turkish fund has offered a headline price of between £60m and £70m to take control of British Steel.

Oyak is the largest shareholder in Erdemir, the Turkish steelmaker which had denied earlier reports that it was associated with the bidding process.

The submission of Ataer’s final proposal to buy the company came days after Sky News revealed that lenders to British Steel were putting pressure on EY to seal a takeover or begin closing down the Scunthorpe site.

White Oak ABL, an asset-based lender that agreed to lend £90m to British Steel 13 in July 2018, has been lobbying advisers working on the auction to bring it to a swift end.

One insider suggested that the OR had signalled to the government that it was prepring to pull the plug on the business as recently as the beginning of this month unless it received a credible offer.

British Steel is losing roughly £5m-a-week, according to sources.

The OR’s appointment‎ came just weeks after Mr Clark handed a £120m government loan to the company to help it meet its obligations under an EU scheme for industrial polluters.

The crisis prompted ‎MPs on the business select committee to launch an inquiry into the future of the UK’s steel industry, although evidence sessions will not kick off until the autumn because of the ongoing sale process.

A spokesperson for the OR said: “The sales process is ongoing and the Official Receiver continues to assess the most viable offers received.”

The Department for Business, Energy and Industrial Strategy repeated an earlier statement that it would “leave no stone unturned” in efforts to secure British Steel’s future.

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