Deal to save British Steel in doubt as talks with Turkish fund near deadline
23/10/2019 15:08
LONDON, Oct 23 (Reuters) - A deal to save Britain's second
largest steelmaker British Steel from collapse is in jeopardy as
exclusive negotiations with Turkey's military pension fund OYAK
approach a deadline without an agreement.
OYAK's affiliate Ataer Holdings was granted a 10-week
exclusivity period to take over British Steel, which went into
liquidation on May 22, ending on Thursday.
Britain is now looking to resume talks with other interested
parties, the Official Receiver said on Wednesday.
Two sources with knowledge of the matter said that India's
JSW Group JSTL.NS and Sanjeev Gupta's GFG Alliance, which had
expressed an interest after the steel producer was put into
compulsory liquidation, will likely return to bid.
JSW and GFG Alliance were not immediately available to
comment.
"While discussions with Ataer are continuing, discussions
with other parties who have expressed continued and renewed
interest in acquiring the whole British Steel business will now
be possible," the Official Receiver said.
"Ataer remain very much interested in acquiring the business
and we remain in detailed discussions with them to conclude a
sale," it added.
British Steel produces high-margin, long steel products used
in construction and rail networks. It has has a series of
contracts to supply steel rails to customers in Britain, Italy,
Spain, Belgium and other European countries, as well as a 60,000
tonne a year supply contract with digger maker Caterpillar.
It sources iron ore and coal, essential primary materials in
the making of steel products, from several countries including
Australia, Brazil and Argentina.
Its closure would impact 5,000 jobs in Scunthorpe, northern
England, and a further 20,000 jobs in the supply chain.
The European steel industry as a whole says it faces a
crisis as U.S. imports tariffs are pushing extra volumes of
steel into Europe.
On top of that, steelmakers in Britain pay some of the
highest green taxes and energy costs in the world, and face high
labour costs and business rates.
(Reporting by Clara Denina
Editing by Alexandra Hudson)
((Clara.Denina@thomsonreuters.com;))