Czech energy group hints at combined bid for British Steel and Speciality Steel UK

The owner of the UK’s largest electric steelworks has said the government should find a single buyer for British Steel and Speciality Steel UK (SSUK), a move that would create the country’s biggest steelmaker.

Sev.en Global Investments, owned by the Czech billionaire Pavel Tykač, said it not only plans to invest £100m in the UK – mainly in the electric arc steelworks in Cardiff it bought last year – but also has the ability to invest “hundreds of millions of pounds” more in Britain under its 7 Steel brand.

Alan Svoboda, Sev.en’s chief executive, told the Guardian the government should look for a large company with a track record of steel production to take on British Steel’s plant in Scunthorpe, Lincolnshire, and the SSUK electric arc furnace operation in South Yorkshire, in a thinly veiled pitch for the government to consider 7 Steel as a potential buyer.

The government took control of British Steel in April last year because of fears its Chinese owners were about to close the business. Four months later the official receiver took control of SSUK from the previous owners, Liberty Steel, after it was declared “hopelessly insolvent”.

Svoboda said he was unable to discuss specific talks with the government or any other parties but that “a combination might be a much more attractive solution” if it needed less taxpayer support.

“It would be a more robust or a more peace of mind-type solution to look for parties that already are feeding the industry, that have steel industry expertise and balance sheet,” he said. “We have a long-term view. We believe we could be a solid partner to the government to achieve something that is very ambitious.”

Svoboda added that there was the potential to invest more in steel processing to make more profitable goods rather than commodity products. He said there was “not really” a need to cut jobs because workers could shift to these “downstream” operations.

Any bidder for the two businesses would have to persuade the government to abandon exclusive talks to sell SSUK to Blastr, a Norwegian startup. It would also depend on the government reaching a deal with British Steel’s Chinese owner, Jingye, to compensate it for its loss of control. However, the prospect may be attractive to government officials, some of whom have previously expressed their hopes for a combination.