Erdoğan business ally Cengiz may buy British Steel

The U.K. government is holding talks with Turkey’s Cengiz Holding as it seeks to find a buyer for British Steel, the Guardian reported.

Cengiz’s founder Mehmet Cengiz enjoys very close relations with Turkish President Recep Tayyip Erdoğan. He has enriched himself by winning several major construction contracts in Turkey since Erdoğan’s government came to power in 2002, including to build and operate Istanbul Airport, which is set to become the world’s largest should all construction phases be completed.

The Turkish firm could potentially step in to buy British Steel should a planned sale to Chinese industrial conglomerate Jingye fail to materialise, the Guardian said on Wednesday. U.K. officials remain confident that Jingye’s £50 million purchase will go ahead despite several obstacles, including problematic negotiations with suppliers and trade unions’ concerns about job cuts and employment benefits, it said.

Cengiz is also involved in construction of Turkey’s Black Sea coastal highway, a high-speed rail project and work on power stations and dams across the country.

A possible bid by Cengiz for British Steel would be the second by a Turkish firm. OYAK, Turkey’s military pension fund, made an unsuccessful attempt to purchase the company last year.

The Guardian said friendly relations between U.K. steel minister Nadhim Zahawi and Erdoğan’s governing Justice and Development Party (AKP) could benefit Cengiz in any further talks. The AKP paid for Zahawi to visit a party conference in Ankara in 2012, funding hotel costs and transport. Zahawi’s air fares were underwritten by a “non-registrable source” in the register of British MPs’ interests, the Guardian said.

Zahawi also has strong ties with the Kurdish regional government that runs semi-autonomous northern Iraq, which has close relations with Erdoğan, the Guardian reported.

Zahawi earned about £850,000 in less than three years as chief strategy officer for Gulf Keystone Petroleum, which is based in Iraqi Kurdistan, the Guardian said. He gave up the position in 2017 to focus on Brexit talks, it said.

https://www.theguardian.com/business/2020/jan/22/cengiz-on-standby-to-buy-british-steel-if-jingye-bid-fails