U.K. Says It Will Consider Other Buyers for British Steel

(Bloomberg) -- Exclusive talks between the U.K.’s Insolvency Service and Turkey’s Ataer Holdings about a sale for British Steel have ended without a deal.

The official receiver for the company, who is managing the sale, will hold discussions with other parties and the potential buyers are expected to visit British Steel sites in the coming days, the insolvency service said on Wednesday. Talks with Ataer, which co-owns steelmakers in Turkey, are continuing as well.

"I remain focused on achieving a sale of the business and assets of British Steel as quickly as possible, to achieve the best possible outcome for the company’s creditors," according to statement from the receiver. "Ataer remain very much interested in acquiring the business.”

The discussions with Ataer, which is owned by Oyak Group, a Turkish group managing military pensions, hit a snag during the due diligence process. Ataer has determined that some of British Steel’s supply deals were uncompetitive and wants them to be revised, according to a person familiar with the matter.

British Steel, the U.K.’s No. 2 steelmaker, was put into liquidation in May, just three years after being acquired by private equity firm Greybull Capital LLP for 1 pound. 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 U.K.

"It is vital that the government continues to stand behind British Steel," said Steve Turner, the assistant general secretary for manufacturing at Unite labor union. “The future of 5,000 direct jobs across the U.K. and a further 20,000 in the supply chain depend on securing a long-term future for British Steel."

©2019 Bloomberg L.P.

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