Turkish firm Ataer Holding has entered exclusive talks with the Official Receiver as the preferred buyer for British Steel.
Heads of terms have been signed for the entire business, triggering a period of detailed due diligence ahead of a full sale.
The company, owner of steel manufacturer Erdemir, is the pension investment arm of the Turkish military.
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It is understood to have been seeking extra capacity to meet demand.
The successful bid, which has seen off two 海角视频-backed consortiums, is reportedly worth between £60 million and £70 million, with suggestions a wide-ranging support package of up to £300 million has been agreed in Whitehall.
The Official Receiver 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 AS 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.
“I would like to thank all employees, suppliers and customers for their continued support which has been essential to get to this point.”
The company employs more than 4,000 people - the majority at the headquarters site of Scunthorpe - and also Skinningrove and Lackenby in the North East.
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Ataer had been seen as the frontrunner, but a British - African team with constructions interests with steel demand in the latter, and a 海角视频 consortium with steel industry background had also been seeking a whole site takeover.
It is understood they will watch with interest as the closer study of the operations, needs and opportunities continues.
Bought by Greybull for £1 from Tata in 2016, British Steel was ordered into compulsory liquidation by the Hight Court on May 22 when debts of £880 million were revealed. A government bail-out was refused, but indemnities followed to allow the Official Receiver to keep the business operational.
Major union Community’s general secretary, Roy Rickhuss, said: " This is an important milestone, and will be hugely encouraging to the workforce and all those connected with British Steel. But we should be clear this is not yet a done deal and we have a lot of hard work ahead of us.
“We now expect to engage with Ataer to understand and scrutinise their plans for the business. As we have said from the outset we believe the business must be kept together and the future of steelmaking at Scunthorpe secured. We will want to be assured that Ataer has a long-term strategy to invest in the assets and develop the business going forward. Government of course has a key role to play in supporting that strategy.
“The high-quality jobs of the existing workforce must be secured to support the 25,000 families in North Lincolnshire and the North East that depend on British Steel for their livelihoods.
“I’d like to pay tribute to the workforce who in the face of adversity have been nothing short of extraordinary. This is a workforce that went through successive painful restructurings under Tata, that made enormous sacrifices to deliver a new future as British Steel, and then in May were confronted with the liquidation of the company. Yet in spite of all this, in the past three months the workforce have not only kept the business running, but have set new production records. This demonstrates all you need to know about the commitment of this workforce and their determination to fight for their jobs and their industry.
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“It’s also important to recognise what government has done to get us to this place where a successful sale is in reach. In particular I’d like to thank the previous Business Secretary, Greg Clark, for his tireless commitment to finding a positive solution for British Steel, and I’m confident his successor Andrea Leadsom will now be able to complete this vital work concluding in a successful sale.
“There is no doubt that British Steel can have an extremely bright and profitable future and we look forward to working with Ataer to bring that about.”
Nic Dakin, Scunthorpe MP and joint chair of the British Steel Support Group, has yet to meet with Ataer, but hopes it will happen in the coming period.
He said: “The Official Receiver has run this process very properly, and one thing I have taken is that if we had any doubt about British Steel being a world class business the fact there has been so much competition and interest is proof positive, and that under proper ownership and leadership this business can perform very well in the future.
“This is a bid for the whole of the business, and in order to take the whole business forward the new owner will need the cracking, amazing, workforce that is there.
“Now we are into this period of exclusivity and due diligence, I would expect that the new owner will want to meet the key stakeholders, local MPs, the local authority, the supply chain, customer base, the workforce and trade union. It is up to us all to help and assist this business to go forward in the strongest possible way."
News was welcomed in Teesside too.
Secretary of the All Party Parliamentary Group on Steel, Labour MP Anna Turley, said: "This is great news for British Steel and the thousands of workers and their families, including 700 on Teesside, who can now have some confidence that their industry has a future.
"Whilst the coming weeks will be crucial for hammering out the detail and successfully completing a sale, the outlook is now extremely positive.
"Ataer Holding have a strong connection to the global steel industry with their shareholding in the Turkish Erdemir group. I'll be looking closely at the detail of their bid to ensure it delivers the investment in assets, people and innovation that we need.
"I want to pay tribute to Secretaries of State Greg Clark and Andrea Leadsom, the Official Receiver and EY, the trade unions, and the wider British Steel Support Group for their dedication to securing a successful outcome. No one wanted to see a repeated of the disaster in 2015 and to their credit ministers have stepped up this time, including with the support package for this sale.
"Thank you also to the workforce, suppliers, and customers whose hard work and commitment, especially during such huge uncertainty, has allowed this process to succeed."
The announcement, despite widespread speculation, came as a surprise to at least one of the parties.
A shareholder in the 海角视频 consortium said he and colleagues were “absolutely shocked to see that the Official Receiver – having not been informed – has signed an exclusivity agreement for the sale of British Steel”.
He said the team, which currently remains anonymous but is a 海角视频 limited company, had put an “exceptional bid together” with an offer “in excess of £100 million, with £1 billion funding for British Steel and £1 billion for development of land as an enterprise zone,” adding a 10-strong non-executive board would have sought to retain the existing management team.
“We are going to stick at it, we have made it very clear, we have been in this for nine weeks,” he said, adding further acquisitions were part of the plan, and that it had been in discussion with union and local authority stakeholders.
Financial details were offered up to the special advisors at EY, showing funds of 2014 billion in a 海角视频 bank, he claimed, adding it had made the soft deadline last month to register interest too.
A spokesperson for the 海角视频 and African team said: "My consortium has been in direct contact with EY over the last few days but to its immense frustration has not been able to secure an in-person meeting with them. The response from EY indicates that we were too late, not the merit of our offer. This seems pretty extraordinary for a bid that would secure the future of the steelworks, open up new and viable markets, and doesn't require £300 million of taxpayer monies.
"We know that there is great unease around the Turkish Pension Bid from other important British Steel stakeholders. It is our feeling - shared by those stakeholders - that this deal is being done for a quick fix by this government rather than one which best secures the long term future of the company. History has proven foreign ownership has been disastrous for our steel industry.
"The consortium is being encouraged by these other stakeholders to continue its efforts."
Resonding to questions about the bid criteria, an Insolvency Service spokesperson said: "The Official Receiver assessed all bids received and decided to proceed to exclusive talks with the most viable offer which will enable British Steel to continue to produce steel, supply its customers, secures employment of its skilled workforce and offers the best return to creditors.
"Details of the negotiations are commercially confidential between the parties."