Military coup? No, but Turkish army pension fund is preferred bidder for British Steel

A report on the BBC website claims that an investment arm of Turkey's armed forces pension fund is the preferred bidder for British Steel.

In a move that will probably be viewed by many as something out of leftfield – a lot of industry observers expected Liberty's Sanjeev Gupta to have some involvement in the future of the company – Ataer Holding, if successful, will be given several weeks to try to buy British Steel out of insolvency. British Steel is the owner of the Scunthorpe steel works in the United Kingdom.

Ataer Holding owns almost half of Turkey's biggest steel producer, Erdemir.

British Steel was put into compulsory liquidation in May, putting 5,000 jobs at risk when talks with the company's owner, Greybull Capital, broke down, risking not just jobs within the walls of the Scunthorpe plant, but also a further 20,000 in the supply chain linked the plant.

The Turkish Armed Forces Assistance Fund (Oyak) is chaired by Mehmet Tas and has interests in cement, agriculture, mining and energy, not forgetting a joint venture with Renault. It has revenues of £8.1 billion. Mr Tas is a former army general.

Ataer was established by Oyak in 2005, according to the Financial Times, and is planning a number of global steel acquisitions. 

The BBC report claims that state-owned Network Rail wants to take over the British Steel divsion responsible for welding, finishing and storing of rails for the UK train network, but has also said that it would prefer a bidder for the whole company to be found.

Gareth Stace, director-general of UK Steel, commented: “Today’s announcement is enormously positive news for British Steel, its workers, and UK manufacturing as a whole. British Steel’s production facilities in Scunthorpe and elsewhere in the North East represent one third of the UK’s steel production and are a major strategic asset to our country; their loss would leave our manufacturing, construction and infrastructure capability in a considerably poorer state.  

“While there is much work still to be done, today’s announcement is an important stepping stone on the way to securing a sustainable future for this cornerstone of British industry. Government support will undoubtedly be critical to taking the process forward from here, and its efforts and interventions provided to date are to be much welcomed.

“However, we must not lose sight of the longer term picture for the whole steel sector just as we see light at the end of this particular tunnel. It is important we move on from the current reactive approach, to one in which a shared, long-term strategic vision sits front and centre.

“The UK steel sector has a potentially bright future, underpinned by increasing UK and global steel demand for our products, but the Government must recognise the need to address the business environment in the UK which currently undermines our competitiveness. The steel industry is ready to invest in its future in the UK, all it requires is a partnership with the Government to help deliver a level playing field that can unlock its potential.”

The GMB, the official union for British Steel's workers, were not so optimistic. Ross Murdoch, the union's National Officer, said: "Our members are staring redundancy in the face as uncertainty continues to hang over the company.

“This dedicated and loyal workforce must not be an afterthought amidst all of the speculation.

“GMB looks forward to engaging with the new management as soon as it is established to ensure direct employment protection and decent terms and conditions for the workers who have been put in this position through no fault of their own. "

Source: BBC website