MINISTERS are close to agreeing a package of financial support for British Steel which could save thousands of jobs, the Mirror understands.

The cash, worth a reported £300million, is to help pave the way for a takeover of the embattled company by a Turkish military pension fund.

British Steel, which employs more than 3000 people at Scunthorpe and is responsible for about 25,000 jobs overall, entered insolvency in May after pleas from its private equity owner Greybull Capital for a state bailout were rejected.

Ministers at the Department for Business, Energy and Industrial Strategy (BEIS) have signed off on the package, according to Sky News

It is understood to be a series of pledges to help the company purchase the company more smoothly – and could include loans on commercial terms and grants.

Ataer Holding is a wholly-owned subsidiary of  Turkey's state military retirement scheme Oyak – that is also the largest shareholder in Turkish steel group Erdemir.

But sources close to the deal told the Mirror that it was not yet a done deal, with a formal announcement of the government's financial support expected in the coming days alongside declaring the group the preferred bidder.

Up to two months of due diligence will follow.

Tees Valley Mayor Ben Houchen said: "The package, which is yet to be finalised, includes a mix of grants, indemnities and loans.

"According to reports, this is expected to pave the way for Ataer Holding to acquire the whole of British Steel.

"Through its subsidiaries, Ataer produces flat and long steel and iron products.

"The formal announcement is still likely in the next few days. A further 6-8 weeks of due diligence is still needed before any deal is signed off and agreed.

"For the avoidance of doubt, the sales process is still ongoing and bids are still being assessed. However today’s reports show that it’s likely British Steel will ultimately be saved and Government is stepping up to the mark to save jobs.

"There is still more work to be done and I will update people when more information when I can. In the meantime, let’s keep up the fight."

Unions are understood have had some reservations about the bid, but are keen to work with any successful company to protect workers jobs at the plant.

Alasdair McDiarmid, Operations Director at trade union Community told the Mirror: “We have always said government must do whatever it takes to secure a successful sale at British Steel.

"Reports that a support package has been agreed are extremely encouraging.

“We look forward to meeting the successful bidder to understand their plans and discuss how we can work together to secure the thousands of jobs that depend on the business.”

Sources familiar with the situation told the Mirror that the official receiver for the company had been working with the company Ataer Holding and the government to finalise the deal in the last few days- but that rival bids were still in the running.

The Mirror has been leading the Save Our Steel campaign, calling on the government to protect the vital British industry and thousands of jobs.

The figures associated with the support package have yet to be finalised but in the long term, it could be worth £300million, according to Sky.

The Turkish fund has offered a headline price of between £60m and £70m to take control of British Steel, according to sources.

A spokesperson for the Official Reciever said: "The sales process is ongoing and the Official Receiver continues to assess the most viable offers received."

A BEIS spokesperson 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.”

Source: Read Full Article