Turkey’s Erdemir denies rumors of bid for struggling British Steel

Turkey’s biggest steel producer, Erdemir Group, has denied making an offer to acquire struggling UK long steelmaker British Steel, it said in a stock exchange disclosure late on Sunday July 14.

“In some news published in [the] international media and reflected in the [Turkish] national media, it was claimed that our company made an offer for the acquisition of British Steel,” the disclosure said. “This claim is unrealistic, and our company has no relationship with the company in question.”
Erdemir produces both flat and long steel products and has recently focused on the export market, amid limited local demand in Turkey for flat steel because of weak consumption among end-users, including the automotive sector.
Export demand for Turkish steel was also facing strong market headwinds.

British Steel had reported “encouraging levels of interest” in the sale of the business when a number of bids were made before the June 30 deadline, the company said on July 5.
The bids were made to the UK Insolvency Service after the company went into compulsory liquidation in May.
“Due to the complicated nature of the group and its businesses, the evaluation and clarification of the offers received will take time,” British Steel chief executive officer Gerald Reichmann said.
“Further engagement with the interested parties and stakeholders [is likely to] take a couple weeks before a further announcement on the sale process will be made,” he added.
Bidders for British Steel have been given a further deadline of midnight on Monday July 15 for their final bids, according to a report from UK news broadcaster Sky News on July 13.
The report had suggested that “Erdemir had hired advisers in London to work on its offer, suggesting it is serious about a takeover of at least part of the UK-based company.”
International metals group Liberty House was considered unlikely to bid for British Steel, sources told Fastmarkets in June.
“We are monitoring the situation at British Steel and share the concern of the whole UK steel industry about the future of the site and the jobs there,” a Liberty House spokesman told Fastmarkets earlier this month.
“We have a strong relationship with British Steel and would like to see it survive the current turmoil, but the business does not fit Liberty’s Greensteel strategy in its current form,” he said.
Indian steelmaker JSW Steel has also been linked to a bid for British Steel. A spokesman declined to comment on “market rumors and speculation.”
The UK’s state-owned railway infrastructure group Network Rail has made an ‘indicative offer’ but only for British Steel’s rail services business, rather than for the company as a whole.
 

Viral Shah

viral.shah@fastmarkets.com

Published

Viral Shah

July 15, 2019

14:32 GMT

London