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Turkish army pension fund in exclusive talks to buy British Steel

The Official Receiver confirmed Aug. 16 that it is in exclusive talks with Ataer Holdings, a subsidiary of Turkish military pension fund Oyak Yatirim Ortakligi AS, for the takeover of British Steel Corp. Ltd., which was placed in compulsory liquidation earlier this year, putting 4,000 jobs directly at risk.

The pension fund had been reported to be interested in acquiring the company and to potentially invest about £90 million in the business.

British Steel, which owns one of the U.K.'s last steelworks in Scunthorpe, was placed in compulsory liquidation in late May after talks failed between the government and private equity owner Greybull Capital LLP for crisis funding. The government gave the Official Receiver an indemnity to enable it to continue paying employees.

The Official Receiver said due diligence would now be undertaken by Ataer, the largest shareholder in Turkey's biggest steelmaker, Erdemir.

"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 finalizing the sale," the Official Receiver said, adding that they expect to conclude the process in the coming weeks.

In a separate statement, Oyak said its priority for British Steel will be to increase capacity and to invest in clean steel production.

In a bid to save the struggling steelmaker, the government had committed to providing a support package of loans, grants and indemnities to assist the buyer.

Ataer beat competition from a number of companies wishing to acquire the company. Network Rail (CTRL) Ltd., a regular customer of British Steel, had said it would be interested in buying the division responsible for welding, finishing and storing rails for the U.K.'s train network, the BBC reported in June. Evraz PLC and SYSTRA SA also expressed interest in buying parts of British Steel, but the government committed to selling British Steel operations together.