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MoneyThe Turkish military pension fund bidding for British Steel

17:16  14 august  2019
17:16  14 august  2019 Source:   msn.com

British Steel in exclusive rescue talks with Turkey's military pension fund

British Steel in exclusive rescue talks with Turkey's military pension fund Turkey's military pension fund has entered into exclusive talks for the takeover of British Steel. Sky News first revealed that Ataer, a unit of Oyak which looks after the pension pots of Turkey's military personnel, had entered into exclusive talks with advisers to the government who have been running the auction of the ailing steelmaker on behalf of the Official Receiver. Your browser does not support this video require(["binding"], function (binding) { binding("wcVideoPlayer", "#video_player_0adcbf95-c147-4a35-8635-61e92b33f808").

The Turkish bid involves boosting production at British Steel ’s main plant in Scunthorpe, north Lincolnshire © AFP. The frontrunner in the bidding for British Steel is a Turkish investment group owned by the country’s military pension fund , which is chaired by a former two-star army general.

British Steel ’s plant in Scunthorpe. Three bidders remain in the running to buy the stricken steelmaker. The business secretary, Andrea Leadsom, has indicated the government is days away from entering exclusive talks with a buyer for British Steel , thought to be a Turkish military pension

The Turkish military pension fund bidding for British Steel © Provided by Financial Times Limited British Steel's Scunthorpe plant is pictured at dawn in north Lincolnshire, north east England on May 22, 2019. - A collapse of British Steel, Britain's second biggest steelmaker, would spark the loss of up to 5,000 jobs at the group's sprawling steelworks in Scunthorpe, northern England. (Photo by Lindsey Parnaby / AFP)LINDSEY PARNABY/AFP/Getty Images

The frontrunner in the bidding for British Steel is a Turkish investment group owned by the country’s military pension fund, which is chaired by a former two-star army general.

Ataer Holding, a wholly owned investment vehicle of the Turkish Armed Forces Assistance Fund, has been in negotiations with the UK government over financial support for a takeover of British Steel, which fell into compulsory liquidation in May.

British Steel buyer hints at need for job cuts

British Steel buyer hints at need for job cuts The preferred bidder for British Steel, Turkey’s military pension fund, has suggested that workers at the company could face a round of job cuts as part of a productivity drive. In an interview on Monday, Toker Ozcan, the head of the fund’s mining metallurgy group, said that productivity was “very low” at the company’s main plant in Scunthorpe. “I am not focused on headcount but on productivity,” he said in an interview with the Financial Times, noting that the company would “take productivity to where it needs to be.” It is thought that plans being considered by the potential new owner could result in several hundred job losses.

An investment group owned by Turkey ’s military pension fund is in last-minute talks about a takeover of British Steel , offering hopes of a deal that One of them added that senior Erdemir employees had visited Scunthorpe for site tours and that British Steel favoured the bid from the Turkish company

An investment group owned by Turkey ’s military pension fund is in discussions for the potential takeover of British Steel . The UK government is in talks with Ataer Holding to rescue the beleaguered steelmaker, the Financial Times reported on Thursday. Ataer is looking for financial undertakings from

The pension fund, known as Oyak, is chaired by Mehmet Tas, the former army general, while its annual general meeting in May was attended by Turkey’s defence minister and the head of the country’s armed forces.

The fund supplements pensions that officers in Nato’s second-largest military receive from the Turkish state and offers its 360,000 members cheap loans and mortgages.

Oyak would appear to have the financial muscle to provide the investment British Steel desperately needs.

Founded in 1961, it has grown into one of the country’s largest conglomerates — rivalling corporate empires owned by the Koc and Sabanci families, who have dominated the Turkish business world for decades.

Its revenues hit $9.8bn (£8.1bn) last year, when it had $19.3bn (£16bn) in assets. Unlike most pension schemes, its payments to members are not fixed, so it has greater financial flexibility.

Ministers agree £300m British Steel support package

Ministers agree £300m British Steel support package The government has agreed to provide financial support to British Steel potentially worth hundreds of millions of pounds, paving the way for Turkey's military pension fund to secure the company's immediate future. Sky News has learnt that ministers at the Department for Business, Energy and Industrial Strategy (BEIS) have signed off on the package, which will encompass grants, possible indemnities, loans on commercial terms and other items. The move will, if finalised, smooth the path towards a takeover of British Steel that would salvage many thousands of jobs.

An investment group owned by Turkey ’s military pension fund is in last-minute talks about a takeover of British Steel , offering hopes of The Turkish bid envisages boosting production at Scunthorpe British Steel ’s problems began when the delay to Brexit this year led Brussels to suspend the award

The Turkish military pension fund bidding for British Steelhttps://on.ft.com/31Ij0aF.

The Turkish military pension fund bidding for British Steel © Reuters

Oyak has interests in cement, agriculture, mining and energy, as well as a joint venture with Renault, the French carmaker.

The official receiver in charge of the process is expected to unveil a preferred bidder within days. The chosen group would enter exclusive talks and be given several weeks to complete due diligence, in order to take the UK’s second-largest steelmaker  out of insolvency and preserve thousands of jobs.

Ataer, which was established by Oyak in 2005 and is the biggest shareholder in Turkey’s biggest steel producer Erdemir, plans to embark on a spate of global steel acquisitions, according to one person close to the group. The company considers buying British Steel a “bold” first step that would be a signal of intent.

Analysts at credit rating agency Fitch said Oyak’s investment strategy had been successful so far but warned that “such businesses are more cyclical and volatile than [those that] invest in the utilities and consumer goods sectors”.

Turkish fund eyes £900m British Steel revival‎ plan

Turkish fund eyes £900m British Steel revival‎ plan The Turkish pension fund plotting a takeover of British Steel is preparing to commit close to £1bn to help fund the company's revival. Sky News has learnt that Ataer Holding, which is poised to enter a formal period of exclusive negotiations to buy British Steel this week, has drawn up a business plan that would involve approximately £900m of investment over several years. The figure is in addition to a support package from the government - revealed by Sky News late last week - that could amount to £300m in the form of grants, indemnities and loans on commercial terms.

Erdemir, a Turkish steelmaker owned by the country's military pension fund , could bid for British Steel , Sky reports.

Erdemir, a Turkish steelmaker owned by the country's military pension fund , could bid for British Steel , Sky reports.

Oyak has intimate ties with the Turkish military, although it does not receive funding from or pay dividends to the government and the managers of the companies it owns are civilians recruited from the business world.

After Recep Tayyip Erdogan, the Turkish president, first swept to power in 2002, some of the fund’s senior management were caught up in efforts to root out alleged plotters from his country's coup-prone military — although the fund itself was never directly targeted.

The Turkish military pension fund bidding for British Steel © Reuters Turkish President Tayyip Erdoga

Critics claimed Oyak was unaccountable and enjoyed special privileges that gave too much economic power to the armed forces.

The company pushed back with a public-relations campaign, arguing that it paid its taxes, was transparent and no different to large second-tier pension funds in the US, Canada and the Netherlands.

Ismet Akca, an expert on Turkey’s military economy, said the fund had largely succeeded in reassuring the Turkish government and the public, adding that the ruling Justice and Development party (AKP) “didn’t touch” Oyak’s investments, its administrative structure or the law underpinning its structure.

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A Turkish steelmaker owned by the country's military pension fund is advancing plans for a takeover of British Steel that would involve keeping its ‎City sources said on Friday that the Turkish group had submitted a proposal for the whole of British Steel and was keen to agree a transaction in the

Reuters reported that British government is set to announce a preferred bid for British Steel within days, with a Turkish fund seen as the front-runner, as it scrambles to save thousands of jobs. Sources told Reuters “A Turkish consortium Ataer Holding led by military pension fund Oyak, which

Industry experts said it would be logical for a rescue of British Steel to involve some kind of commercial tie-up with Erdemir. Ataer owns 49.3 per cent of Erdemir, which stands to benefit from any deal through increased sales opportunities.

The Turkish manufacturer does not produce enough basic steel for its “downstream” plants, which process metal into value added forms. Since British Steel has the opposite problem, resulting in lossmaking production, it could ship metal to Erdemir factories.

The Turkish bid involves boosting production at the Lincolnshire site and is favoured by British Steel, according to one person close to the company. “We are now at 2.5m tonnes [annual output]. They would like to increase this significantly. That helps as it reduces the cost per tonne,” they added.

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It would also implement a cost reduction plan drawn up by management in conjunction with consultants at McKinsey, with an aim to build a new furnace and run British Steel’s main Scunthorpe plant on gas by 2030, the person said.

This would come as a relief for workers who fear that a break-up of the company, which includes smaller factories in north-east England and mainland Europe, would lead to closures and mass redundancies.

The immediate challenge for any new owner is stark. British Steel has already lost a significant amount of orders because of Brexit uncertainty. The UK’s high industrial electricity prices have hamstrung heavy manufacturers.

Working capital will have to be rebuilt while decades of under-investment have left its facilities in need of significant upgrades, with as much as £500m of expenditure required, according to one former employee.

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