British Steel set to be bought by Turkish army’s pension fund

Ataer Holding, affiliate of pension fund, plans to close deal by end of year

Turkey’s military pension fund Oyak has been picked as the preferred buyer for British Steel, easing fears for thousands of jobs at the steelmaker that collapsed in May.

Ataer Holding, an affiliate of Oyak, plans to close the deal by the end of the year, Oyak said. Ataer now has exclusive rights to look into Britain’s second-largest steelmaker in greater detail over the next two months as part of due diligence.

“During the exclusivity period, close negotiations will be held with customers, suppliers and employees who will play an important role in the future success of British Steel,” Oyak said.

If due diligence is finalised successfully in October, the transfer of the company will be completed by the end of this year, it added.

The official receiver for British Steel said: “I have now received an acceptable offer from Ataer Holdings AS for the purchase of the whole business and I am now focusing on finalising the sale.

“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.”

The deal will throw a lifeline to the steelmaker’s 5,000 workers, most of them in the UK, and another 20,000 people employed in its supply chain.

It was put into compulsory liquidation after a breakdown in talks between the government and British Steel’s owner Greybull Capital, which bought the company for £1 just weeks before the EU referendum in 2016.

The government had lent British Steel £120m but Greybull asked for more to deal with “Brexit-related” issues. However, the then business secretary Greg Clark said there remained no legal options to provide further financial support. Insolvency experts called the company’s collapse “the first heavyweight casualty of Brexit”.

British Steel had been struggling with falling orders from EU customers, which it said were linked to uncertainty around tariffs on steel after Brexit. ​

Steelmakers had also been damaged by a weak pound that had pushed up the cost of raw materials and a flood of cheap imports from China.

Business secretary Andrea Leadsom welcomed the provisional deal, saying it was an important step in saving British Steel.

Trade union Unite said the news was a relief but added that the government must still help British Steel and the wider UK steel industry tackle high energy costs and business rates. 

“It is also essential that the government acts to prevent a disastrous no-deal Brexit which would lead to cheap steel being dumped in the UK market,” said Harish Patel, the union’s national officer for steel.