A Turkish investment group tipped as the preferred bidder for British Steel Corp. Ltd. is preparing to invest around £900 million into the insolvent steelmaker, Sky News reported Aug. 11, citing unnamed sources.
A separate Aug. 9 report also said the U.K. government has agreed to support British Steel with a financial rescue package of up to £300 million, allowing Turkey's military pension fund to take over the steelmaker, citing sources familiar with the matter. Ataer Holding reportedly offered a headline price of between £60 million and £70 million for British Steel.
According to the report, the package approved by ministers of the country's Department for Business, Energy and Industrial Strategy covers grants, potential indemnities and loans on commercial terms, among others.
The deal would enable British Steel's official receiver to grant Ataer Holding a formal exclusivity period to complete a takeover of the beleaguered steelmaker. A formal announcement on this is expected to be made on Aug. 13.
Sources said the funding would not be in breach of EU regulations that restrict government aid for companies, which played a role in the government's previous decision not to extend crisis funding to British Steel as requested by then-parent Greybull Capital LLP.