British Steel open to offers after Turkish bid falters

Chinese steelmaker Jingye Group could return to make a bid for British Steel after the Turkish company Ataer's period of exclusivity of taking over the manufacturer ended without agreeing terms.

Jingye, which is based in Hebei province in North China, contacted the British government last month to express fresh interest in a takeover of the United Kingdom's second-biggest steel producer, Sky News reported.

The fate of more than 4,000 British Steel workers, and of up to 20,000 additional jobs in its supply chain, rest on securing the company's future, and that of its plants in Scunthorpe and Northeast England.

Jingye did participate in the earlier phase of the British Steel sale process but was reported by the Financial Times in July to have withdrawn its interest. It is expected that British company Liberty House, run by businessman Sanjeev Gupta, is also likely to rekindle its interest.

The Chinese groupalso operates in the chemicals, hospitality and real estate sectors. According to its website, Jingye employs more than 22,000 people and exports its steel products to dozens of countries.

British Steel fell into insolvency in May after the government decided against providing a 30-million-pound ($39 million) loan to the company under its then-owner, Greybull Capital, but has been kept running by the UK government as it seeks a buyer for the business.

The Official Receiver, a civil servant appointed by the Insolvency Service, has been managing its liquidation. An exclusivity agreement with Ataer, which is a subsidiary of Oyak, the Turkish armed forces pension fund,was signed in mid-August as a stepping stone toward finalizing a deal.

Insiders said at the time that the exclusivity period would last for about eight weeks, giving Ataer until the middle of this month to conclude negotiations with the government.

The Official Receiver could not engage in discussions with rival bidders during the exclusivity period, but the Department for Business, Energy and Industrial Strategy was not prohibited from holding talks with other potential buyers of British Steel.

The Turkish fund had offered a headline price of between 60 and 70 million pounds to take control of British Steel, but the Turkish military's recent actions in Syria may have thrown a cloud over the deal, with concerns expressed by some about the possible takeover.

"While discussions with Ataer are continuing, discussions with other parties who have expressed continued and renewed interest in acquiring the whole British Steel business will now be possible,"the Official Receiver said on Wednesday, adding that the focus was on achieving a sale as "quickly as possible".

"Meanwhile, Ataer remain very much interested in acquiring the business and we remain in detailed discussions with them to conclude a sale."

It was revealed in August that Ataer had drawn up a business plan involving around 900 million pounds of investment in British Steel facilities over a period of several years.

The government had also agreed an outline support package totaling hundreds of millions of pounds in the form of grants, indemnities and loans on commercial terms.