British Steel is rumoured to have found its potential buyer in Turkish investment group, Ataer Holdings. The Financial Times reported that the Group, owned by Turkey’s military pension fund is in advance talks with UK government to strike a deal, saving over 4,000 jobs and the Scunthorpe steelworks.
Ataer Holding is a wholly-owned unit of Turkey’s military pension scheme Oyak, which is also the largest shareholder of Erdemir, Turkish steel maker. According to people close to the matter, the deal is close to final talks but not done yet because it involves certain legislative issues. Ataer’s takeover of British Steel might come in conflict with EU rules, which restrict state aid for companies.
Besides Ataer, the other two potential bidders of British Steel were, Liberty House and Greybull Capital. As per a source who was part of the conference call with the business secretary, Andrea Leadsom, on Thursday morning said two were likely to be excluded, as a deal with either would prove to be complicated.
UK steel maker has been on a look out for a potential buyer since May, when it disclosed bankruptcy, as its request for a state bailout from its private equity owner, Greybull Capital, got rejected.
British Steel landed in the state of insolvency due to delayed Brexit, and the uncertainty around it. Delay in the withdrawal process led to Brussels suspending the carbon credits to the UK companies. It left the company in a £120m government loan to meet an environmental bill. Whereas due Brexit uncertainty the company’s orders fell and the UK government refused to provide the much-needed emergency funding to it. It led to compulsory liquidation of the UK steel maker. But its business kept on going, with a taxpayer-backed indemnity taking care of its bills and employee wages.
British Steel, besides operating out of UK, also has smaller units in north-east England, France and the Netherlands.