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Turkish military pension fund in talks to acquire British Steel

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Sunday 18, August 2019 BY Kuda Muzoriwa

British Steel was put into liquidation in May, just three years after being acquired by private equity firm Greybull Capital for one pound from Tata Group.

Oyak Group, the manager of Turkey’s military pensions fund has entered exclusive talks to acquire British Steel, the first step in a rescue that could save about 5,000 jobs in the UK’s manufacturing heartland, reported Bloomberg.

In addition to contracting demand, surging costs and cheap imports, British steelmakers face uncertainty around Brexit, with some European Union customers concerned that tariffs could be imposed on shipments from the UK

Oyak Group, with assets of more than $19 billion, will review British Steel over the next two months, while talking to the company’s customers, suppliers as well as employees and labour unions.

The UK’s Insolvency Service said that the firm’s Ataer Holdings unit, which co-owns steelmakers in Turkey, is the preferred buyer after making an acceptable offer.

The threat to British Steel would leave the UK’s steelmaking industry, which once supplied almost half the world, with just one primary site, where giant blast furnaces swallow iron ore and coking coal. The company’s collapse has highlighted the risk to jobs as Brexit uncertainty threatens to cripple key British industries.

Last week, local media reports said that that Oyak offered GBP 60 million to GBP 70 million ($73 million to $85 million) for British Steel, while the UK government considered a financial support package worth as much as 300 million pounds.

Oyak stated that the deal complements its regional growth ambitions in the steel industry and the acquisition of British Steel under the Ataer umbrella is the first step.

 

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