British Steel in exclusive talks with Turkish military pension fund

Turkey's military pension fund has entered into exclusive talks for the takeover of British Steel.

Sky News first revealed that Ataer, a unit of Oyak which looks after the pension pots of Turkey's military personnel, had entered into exclusive talks with advisers to the government who have been running the auction of the ailing steelmaker on behalf of the Official Receiver.

British Steel, which has its largest manufacturing site in Scunthorpe, collapsed into insolvency in May after the government chose not to give £30m to the company under its then-owner, Greybull Capital.

In a statement, Ataer Holding said it was now exclusively conducting a detailed financial, legal and operational review for a period of two months.

It said: "During the exclusivity period, close negotiations to be held with customers, suppliers, employees and trade unions is significant for the future success of British Steel."

Ataer said since British Steel went bankrupt on 21 May and entered a formal auction process, nearly 80 bidders across the world have expressed an interest.

The Official Receiver, a government agency responsible for the auction process, said the talks were for the whole of British Steel.

It said: "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 Holdings A.S. 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."

OYAK general manager Suleyman Savas Erdem said: "We have achieved one of the biggest achievements of the Turkish steel industry and signed a preliminary agreement to buy the industrial giant of UK, British Steel.

"We will continue to evaluate opportunities globally inline with our growth-oriented vision and we will continue our investments to provide sustainable high benefit to our members."

Around 4,000 people are employed at Scunthorpe, with more than 700 employees in Teesside and an estimated 20,000 in its supply chain.

John Cullen, business recovery partner at accountancy firm, Menzies LLP, said the development will safe guard the future of the plant in the short to medium term.

He said: "Ataer requiring more steel for its 'downstream' plants, means production in the UK could increase post-sale, which would be very good news for the domestic workforce.

"The sale could also open the door to more export opportunities in Europe.

"If the sale to Ataer Holding goes ahead, this could secure the future of the plant for the short to medium term.

"However, in order to stop history repeating itself, developing a bold new vision for British Steel will be essential."

Sky's City Editor Mark Kleinman exclusively revealed that Ataer's bid in British Steel came after lenders to the steelmaker put pressure on EY, the adviser to the government, to seal a takeover or begin closing down the Scunthorpe site.

Since its collapse into liquidation, British Steel ‎has been funded through a taxpayer-backed indemnity and is estimated to be losing around £5m a week.