The future of 1,500 jobs at one of Britain’s largest steel producers has been thrown back into uncertainty after exclusive negotiations to rescue Speciality Steel UK collapsed, forcing the government to resume its search for a buyer.
Talks between government officials and Norwegian company Blastr over the acquisition of the South Yorkshire steelmaker, which operates sites in Rotherham and Sheffield, ended after Blastr’s preferred bidder status expired without an agreement being reached. The firm had appeared to be edging closer to securing a deal earlier this year.
An Insolvency Service spokesman confirmed the process would now continue without an exclusive partner. “A period of exclusivity was entered into with a preferred bidder, and we now continue to pursue the sales process,” the spokesman said.
The government took control of Speciality Steel UK, Britain’s third-largest steel business, in August last year after metals tycoon Sanjeev Gupta faced a winding-up order from creditors owed hundreds of millions of pounds. Responsibility for finding a new owner subsequently passed to the official receiver. Blastr, a Norwegian start-up yet to begin production at its first facility in Finland, was granted preferred bidder status in April, initially giving the company a five-week exclusivity window that was later extended before discussions ultimately broke down.
Despite the loss of its exclusive status, Blastr is understood to remain engaged in the process, with sources close to the company suggesting contracts could still be exchanged within weeks. The end of exclusivity has, however, opened the door for Czech billionaire Pavel Tykac, whose investment vehicle Sev.en Global Investments had previously been viewed as Blastr’s main rival for the business. Sev.en recently announced plans to invest £100 million in its Cardiff steelworks, signalling its continued ambition to expand within the UK steel sector.
A spokesman for Sev.en Global Investments said: “The UK Government has rightly backed the industry through its Steel Strategy, and to fulfil this strategy it is vital to find the right partners for British Steel and Speciality Steel to operate these strategic assets. Sev.en Global Investments has the proven steelmaking experience, and the vision and financial firepower to back it.”
One obstacle facing Sev.en could be reported government proposals to merge Gupta’s former steel business with state-controlled British Steel rather than sell it to an external buyer.
The uncertainty comes as the wider UK steel industry braces for significant changes to import tariffs due to take effect at the start of next month. Business Secretary Peter Kyle has backed the measures, which will double import taxes on certain steel grades and halve tariff-free quotas, describing the reforms as central to “closing the decades-long chapter of destructive de-industrialisation and committing instead to strengthening and sustaining Britain as a steelmaking nation.” Primary steel producers including British Steel and Tata Steel have welcomed the changes, but downstream manufacturers that process semi-finished steel into finished products have raised concerns, disputing the government’s assertion that the protections apply only to grades already produced domestically.
Liam Byrne, chairman of the Commons business and trade committee, warned last month that the planned tariff changes could threaten Britain’s ability to manufacture warships and nuclear submarines, while also posing risks to the aerospace and Formula One sectors.
