Norway's Blastr in talks over funding for Speciality Steels bid - report

(Sharecast News) - Norwegian green steel group Blastr has reportedly approached investors to help it clinch a takeover of Britain's third-biggest steel producer, Speciality Steels UK (SSUK). According to Sky News, Blastr has been holding talks with a number of prospective backers of an offer for Speciality Steels UK more than six months after the latter company collapsed into liquidation.

Privately-owned Blastr is among a small number of parties which have been holding talks with the Official Receiver about a deal to buy SSUK, which operates from sites in Rotherham and Sheffield.

Employing well over 1,000 people, SSUK was part of the Liberty Steel metals empire of Sanjeev Gupta, who is facing financial, legal and regulatory battles on several fronts. The business was declared "hopelessly insolvent" by a judge last summer, and collapsed into compulsory liquidation.

Blastr is run by Mark Bula, a steel industry veteran who has worked at the American companies Nucor and Big River Steel.

It is said to be seeking substantial funding to conclude a takeover of SSUK. Last month, Sky News reported that it had retained investment bank Evercore to advise on its interest in the business. Evercore has also been engaged by the UK government to advise on its strategy for the steel industry, including options which could lead to the merger of SSUK with other sector assets.

Sky said Blastr is understood to have drawn up plans to move its holding company from Norway to the UK, although it is unclear whether that move is dependent upon a successful acquisition of SSUK.

The other remaining bidders for SSUK are understood to be Arabian Gulf Steel Industries (AGSI), which is headquartered in Abu Dhabi, and 7 Steel UK, owned by Czech energy tycoon Pavel Tykac and which last year bought the Allied Steel and Wire site in Cardiff from Spanish firm Celsa.

According to Sky, a decision about a preferred bidder is said to be possible within weeks, although it is plausible that none of the shortlisted suitors will be able to strike a satisfactory deal.

One source said that global stainless and speciality steel producer Aperam, which was spun out of ArcelorMittal in 2011, has also been involved in recent discussions about the future of SSUK. The source said that Aperam's expertise would be vital to a successful takeover of SSUK's Stocksbridge site, which is focused on manufacturing specialised steel products.

Gupta himself had secured backing from third parties including Blackrock, the world's biggest asset manager, although the prospect of him being chosen to repurchase the business appears to be extremely remote.