Norway's Blastr in the running to buy Speciality Steels UK - report

(Sharecast News) - Norwegian green steel group Blastr is reportedly in the running to buy Speciality Steels UK (SSUK), Britain's third-biggest producer of the metal, six months after it collapsed into liquidation. According to Sky News, privately-owned Blastr is among a small number of parties which remain in 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 metals empire of Sanjeev Gupta, the tycoon who is facing financial, legal and regulatory battles on a multitude of fronts.

The business was declared "hopelessly insolvent" by a judge last summer, and collapsed into compulsory liquidation. Since then, a number of parties have stepped forward with proposals to rescue SSUK.

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

Both businesses are said to have successfully disrupted traditional blast furnace production with electric arc furnace steelmaking technology.

Based in Norway, Blastr was set up to create an iron and steel value chain in the UK and Europe, with a low-cost, globally competitive and environmentally sustainable footprint.

Sources close to the situation told Sky that Blastr had retained Evercore, the investment bank, to advise on its interest in SSUK. 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.

One insider told Sky that Blastr was scouring the industry for strategic acquisitions which could enable it to deliver ultra-low emission iron and steel at the lowest cost in the UK and Europe.

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.

A deal for Blastr to buy Gupta's former assets would probably involve a special purpose vehicle being set up, the insider added.

Blastr joins rival bidders including Abu Dhabi-based Arabian Gulf Steel Industries (AGSI) and 7 Steel UK, owned by Czech energy tycoon Pavel Tykac.

Whitehall insiders said a decision about a preferred bidder could be made within weeks, although they cautioned that it was plausible that none of the shortlisted suitors might be able to strike a satisfactory deal.

The financing of any of the bids remains unclear, Sky said.