A rescue deal has been agreed that will take an infrastructure design consultancy owned by British Steel out of liquidation saving some 400 jobs, according to three people aware of the situation.
TSP Projects is being bought by the French engineering and consultancy group Systra, even as Turkey’s military pension fund ploughs ahead with plans to acquire the rest of the stricken steelmaker.
The decision to sell the subsidiary was taken by the Official Receiver, who has been in control of the UK’s second-largest steelmaker since it collapsed into insolvency in May. An announcement could come as soon as Friday morning, said one person aware of the details of the transaction.
TSP Projects undertakes work for government, developers and manufacturers, with clients including Network Rail, BAE Systems and Morgan Sindall.
Ataer Holding, an investment group owned by the Turkish military pension fund Oyak, is undertaking final due diligence after being named preferred bidder for the rest of British Steel, which collapsed when the government rejected its pleas for a state bailout.
The UK’s second-largest steelmaker employs more than 4,000 people across its large Scunthorpe plant and other sites throughout north-east England, France and the Netherlands.
The deal for TSP Projects obtained the green light after an agent acting on behalf of senior secured creditors to British Steel agreed to lift the security it held over the subsidiary, in effect removing a claim over the business.
Most of the consortium of asset-based lenders to British Steel, led by PNC, have already been paid off in recent months as customer bills have come in. Approval for the security release was granted by White Oak Asset Finance, an arm of a US credit fund, which is still owed money by the company, said two people aware of the situation.
Systra had argued in private that it was a more natural fit as an owner for TSP Projects, which is not a manufacturing operation unlike the rest of British Steel.
TSP Projects generated pre-tax profit of £1.35m in the year ended March 31 2018, on revenue of £33.8m, its most recently filed accounts show.
It will join a French company with 6,700 employees that generated pre-tax income of €14.6m on revenue of €586m in 2018. Systra’s shareholders include SNCF, the French state-owned railway operator.
The deal will double Systra’s UK headcount overnight to 800 employees. Systra will also take on the pension liabilities of TSP Projects, which was once part of British Rail.