Confidence in Turkish ambition for British Steel has been expressed, despite Ataer Holdings’ exclusivity window with the Official Receiver closing.
As special managers are now instructed to re-open talks with other parties and discussions continue with the preferred bidder, the company's union leader on the largest single site has told how a visit to the heart of Ataer’s operations was positive.
Paul McBean, British Steel’s Scunthorpe works multi-union committee chairman, believes the subsidiary of Turkey’s state military retirement scheme Oyak and the largest stakeholder in Turkish steel group Erdemir, is still leading the race, with visions of expanding the Scunthorpe works using spare land at the plant as part of a massive programme of investment.
The Scunthorpe works are already on Heathrow Airport’s shortlist of sites for a logistics hub too, with a huge legacy for major national construction projects thought to be the prize if it won through to deliver on the third runway proposal.
This week saw speculation had emerged that the Ataer deal, progressed in August, was close to collapse, with supplier negotiations reported to be an issue. The GMB has called for a return to public ownership, however, Mr McBean is positive after the visit.
He joined Community union leader Roy Rickhuss, meeting officials from Ataer and touring a plant. He said he had been given an indication of Ataer’s plans for the Scunthorpe site, with the group intending to “run it as it is” but also make new additions.
He said: “We would expect some changes but massive investment. They were impressed with the amount of spare land that we have got to build new things while other stuff is still running.
“With other plants they have looked at in Europe, they would have to take some things out but with our plant, they could actually build something while keeping other areas running.”
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British Steel directly employs around 4,000 people, the majority of whom are in Scunthorpe, but with further works in the North East.
Mr McBean said: “We met with the other unions and they were happy to have us on board.
“We met the management team at Ataer and went around one of their plants and it was impressive. This plant they have taken over was making massive losses five years ago, and now, it is totally the other way around - making massive profits and all of the workers are sharing in, bonus-wise.
“I got to speak to quite a few of the workforce and they were happy to be working with the company. It was all positive.”
The future was thrown in doubt in May when it was placed in compulsory liquidation following a High Court hearing that revealed debts of £880 million.
Reports earlier this week suggested the Liberty House Group, owned by steel tycoon Sanjeev Gupta, was in fresh talks with the Government about buying British Steel, with Chinese firm Jingye Steel also believed to have renewed an interest in the company.
Mr McBean said: “We met the company itself and it is still on track, regardless of what has been in the press.
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“When we got back, I fed back to the special managers and the Official Receiver said to ignore what we read in the press because it is all systems go.
“They have got exclusivity until 4pm today (Thursday) and then, it is open for the Chinese and others to come in if they want to.
“The Chinese company has changed from not wanting to get into a bidding war to now, they want it. Liberty has not gone away but the first choices would be Ataer or the Chinese.
“Ataer has not gone away and we have been told not to worry, just to wait. The workforce gets jittery as it gets closer but everything is still on track and going as it should be and it is a case of waiting and seeing.
“All I want is someone’s name on a dotted line to say they are going to buy it and everybody then can settle down and get on with what they do.”
“If Ataer want to take longer than 4pm (Thursday), others will also get to see the paperwork. It is a good thing because three years ago, there was only one buyer and we had to persuade them to take it.”
Addressing the reports in the Financial Times earlier this week relating to suppliers, Mr McBean said: “Some of the contracts that were signed up several years ago could have been done better. What Ataer probably can’t understand, and what we can’t understand as a workforce, is that some of our suppliers make more profit than British Steel.
“It doesn’t seem right that they make more profit out of it than British Steel does itself. We have some massive suppliers and contracts and everybody seems to be making money out of us, bar us.
“I think they have met the suppliers and contractors and a lot of them are willing to play ball but some are saying they have got a contract and that is it.
“I asked the question that when another company takes over, it is a brand new start and a brand new contract and that is my feeling. Whatever contracts British Steel had are now gone, so we start with a new company and new contracts.”
GMB said a concrete commitment was required now, calling for the government to take ownership.
Charlotte Childs, GMB organiser, said: “We went to Turkey last week and were encouraged by the operation.
“Testimonies from their trade unions, as well as staff and the British ambassador, indicated a slick operation that seems to deliver on their promises.
“In light of that it’s very disappointing some suppliers appear to be putting stumbling blocks in the way.
“We understand to maintain competitive contracts, but if the cost of this lack of flexibility is going to be the loss of steel making in Scunthorpe then everyone is a loser.
“GMB believes there are a number of other bidders waiting in the wings if this deal is not viable.
“But what our members need now is a concrete commitment to steelmaking in Scunthorpe.
“GMB calls on the 海角视频 government to bring British Steel into public ownership to ensure that our communities and jobs are protected and that the 海角视频 doesn’t let one of its cornerstone industries die.”
In addition to Liberty and Jingye, consortiums including British and West African business figures were also interested in the summer, with steel and construction backgrounds.
Task force member and North Lincolnshire Council leader Rob Waltham said: “As far as I know, it is still going ahead and they are still working towards a deal.
“As far as I am concerned, we will talk to anyone who can secure the future of the site and we will continue to work with the Government.”
In a statement, Scunthorpe MP Nic Dakin said the “fundamentals” remained unchanged.
He said: “This is a strong business, which is reflected by the continued interest of a number of parties in buying British Steel. I am continuing to do everything I can to ensure that there is a successful outcome.
“It is essential that the Government continues to support British Steel and our steel industry.
“We are a great nation. We make great steel. If we are serious about having our defence and infrastructure security in our own hands, we need to retain our own steelmaking capacity.”