UK markets closed

British Steel buyer hints at need for job cuts

Edmund Heaphy
Finance and news reporter
A British Steel sign in in Skinningrove in England. Photo: Ian Forsyth/Getty Images

The preferred bidder for British Steel, Turkey’s military pension fund, has suggested that workers at the company could face a round of job cuts as part of a productivity drive.

In an interview on Monday, Toker Ozcan, the head of the fund’s mining metallurgy group, said that productivity was “very low” at the company’s main plant in Scunthorpe.

“I am not focused on headcount but on productivity,” he said in an interview with the Financial Times, noting that the company would “take productivity to where it needs to be.”

It is thought that plans being considered by the potential new owner could result in several hundred job losses.

British Steel currently employs around 5,000 workers, and around 3,000 of them work at the plant in Scunthorpe.

The takeover, by Ataer Holding, the investment vehicle of the fund’s mining metallurgy group, is expected to be completed within two months.

The Official Receiver on Friday said that it had received several bids for British Steel, but said that Ataer Holding was its “preferred buyer.”

“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.

The company went into liquidation in May after the breakdown of rescue talks with the government.

The collapse of the company could have resulted in thousands of job losses, and put up to 20,000 further jobs in the supply chain at risk.

Trade body UK steel noted that British Steel facilities were responsible for one third of the Britain’s overall steel production, noting that this was a “major strategic asset” to the nation.

“Their loss would leave our manufacturing, construction and infrastructure capability in a considerably poorer state.”