British Steel preferred buyer will be decided in coming days

By:

Add as a preferred source on Google
The Government is to pump up to £500 million into Britain’s biggest steelworks as part of plans to produce “greener” steel which could also hit thousands of jobs, sources have said.
The Government is to pump up to £500 million into Britain’s biggest steelworks as part of plans to produce “greener” steel which could also hit thousands of jobs, sources have said. (Photo by Christopher Furlong/Getty Images)

Business secretary Andrea Leadsom is poised to announce the government’s entrance into exclusive talks with its preferred buyer of stricken industrial firm British Steel.

Leadsom held a conference call with the three potential buyers still in the race earlier today, telling them one would be chosen in the coming days.

Read more: British Steel’s collapse under former owner Greybull turns up the heat on Whitehall

City PM understands two of the companies, Liberty House and Turkish military pension fund Oyak, are clear frontrunners in the business secretary’s eyes.

Oyak is the largest shareholder in Turkish steel giant Erdemir, while Liberty House is a British industrials firm owned by metal magnate Sanjeev Gupta.

Several weeks’ due diligence still needs to take place after they sign an exclusivity agreement, which is likely to take the form of a memorandum of understanding.

British Steel’s failure in May has left 5,000 jobs hanging by a thread, mostly at the firm’s main steelworks in Scunthorpe. Around 20,000 more people’s jobs also rely heavily on the company, which is Britain’s second-biggest steel maker behind Tata. 

The official receiver took control of the firm and has kept its furnaces firing as normal while the government searches for a buyer.

Labour MP for Scunthorpe Nic Dakin told City PM EY, trade unions and the management team had done an “excellent job” in keeping the business going. 

“But we’re getting to a point now where people need that level of confidence that it’s going to the next stage. It’s a long while to be in an uncertain situation regarding your job.”

Read more: British Steel collapse: Aftermath could have ‘tsunami-like’ effect on industry

British Steel also runs plants in North Yorkshire. Labour MP for nearby Redcar Anna Turley said: “I asked for assurances that the whole company will be kept together without cherry-picking. The secretary of state and EY confirmed this is still the priority. Everyone is working flat out to progress the sale to the next stage. Optimism that this can be achieved soon remains high.”

A spokesperson for the Department for Business, Energy and Industrial Strategy said: ““This government will leave no stone unturned to get a good solution for British Steel at Scunthorpe, Skinningrove and on Teesside.

“The official receiver continues to run the business, whilst the sales process is ongoing.”