Saturday, 08 August, 2020

British Steel To Be Taken Over By Turkish Army's Pension Fund

Steel production is responsible for seven per cent of global emissions | Credit Worldsteel  Robert Kolykhalov Steel production is responsible for seven per cent of global emissions | Credit Worldsteel Robert Kolykhalov
Ginger Lawrence | 18 August, 2019, 13:39

Turkey's military pension fund has reached a tentative deal to buy British Steel out of insolvency.

"The acquisition of British Steel under the Ataer umbrella is the first step taken in the future plans of our Group", said Toker Özcan, Oyak's mining and metallurgy group head.

Closure of the company, which produces high-margin, long steel products used in construction and rail networks, would jeopardise 5,000 jobs in Scunthorpe, northern England, and a further 20,000 jobs in the supply chain.

British Steel, which is now owned by private investment company Greybull Capital LLP, has said its workforce, and an additional 20,000 employees in the supply chain, are at risk of losing their jobs if a suitable buyer can not be found.

In a statement today Oyak said its investment arm Ataer Holdings had signed an exclusivity agreement to buy the United Kingdom firm, which has annual crude steel production capacity of 4.5 million tonnes and employs 5,000 people at a number of sites across the United Kingdom, including the giant Scunthorpe and Teesside steelworks.

It said: "During the exclusivity period, close negotiations to be held with customers, suppliers, employees and trade unions is significant for the future success of British Steel".

But GMB national officer Ross Murdoch warned that its members were still "staring redundancy in the face" due to the continuing uncertainty.

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"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".

British Steel's official receiver said it had several approaches for the business, but has now entered into exclusive talks with Oyak - Ataer's parent company.

"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", the Official Receiver said, adding that the focus was now on finalising the sale.

"This dedicated and loyal workforce must not be an afterthought amidst all of the speculation", he said.

The government has previously said it would "leave no stone unturned to get a good solution for British Steel at Scunthorpe, Skinningrove, and on Teesside", which are the company's three main manufacturing bases in the UK. Ataer owns part of major Turkish steel producer Erdemir.

"Ataer requiring more steel for its "downstream" plants, means production in the United Kingdom could increase post-sale, which would be very good news for the domestic workforce", John Cullen, business recovery partner at accountancy firm, Menzies, said.

Gareth Stace, director general of the employers' association UK Steel, welcomed the news but urged the British government to do more to help the steel sector.