The owner of the UK's largest electric steelworks has suggested that 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 Czech billionaire Pavel Tykač, has indicated it not only plans to invest £100 million in the UK—primarily in the electric arc steelworks in Cardiff it acquired last year—but also has the capacity to invest "hundreds of millions of pounds" more in Britain under its 7 Steel brand.
Government Takeover and Potential Consolidation
The government took control of British Steel in April last year amid fears that its Chinese owners were about to shut down the business. Four months later, the official receiver took control of SSUK from its previous owners, Liberty Steel, after it was declared "hopelessly insolvent." Alan Svoboda, Sev.en's chief executive, told the Guardian that the government should seek a large company with a proven track record in steel production to take over British Steel's plant in Scunthorpe, Lincolnshire, and SSUK's electric arc furnace operation in South Yorkshire. This was a thinly veiled pitch for the government to consider 7 Steel as a potential buyer.
Svoboda stated he could not discuss specific talks with the government or other parties but noted that "a combination might be a much more attractive solution" if it required less taxpayer support. He emphasized that such an approach would be "a more robust or a more peace of mind-type solution" that would involve parties already familiar with the industry, possessing steel expertise and strong balance sheets. "We have a long-term view. We believe we could be a solid partner to the government to achieve something that is very ambitious," he added.
Investment Plans and Job Prospects
Svoboda highlighted the potential for further investment in steel processing to produce more profitable goods rather than commodity products. He suggested that job cuts might not be necessary, as workers could transition to these "downstream" operations. Sev.en's planned £100 million investment in Cardiff and other UK sites acquired from the Spanish group Celsa may include a new furnace using hydrogen to melt steel. Svoboda called for a "more thorough debate" on the future of British Steel and SSUK. "We are still in growth mode," he said. "We still have capital to deploy. We are trying hard to get exposed to the industry more."
Any bidder for the two businesses would need 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 compensation deal with British Steel's Chinese owner, Jingye. However, the prospect may appeal to government officials, some of whom have previously expressed hopes for a combination.
Impact of Protectionist Tariffs
Svoboda said Sev.en's investment plans were partly driven by the UK government's decision to impose 50% protectionist tariffs on global steel imports above set quotas. These tariffs give UK steelmakers a competitive advantage in their home market. "With the introduction of these measures, we became excited to make more investment," Svoboda said. He acknowledged that the steel industry was "not yet out of the bottom of the cycle" of a global downturn, but in the longer term, "We are big believers in the steel industry in the UK."
SSUK's electric arc furnaces are generally seen as attractive assets that were starved of operating cash. Svoboda noted that British Steel would require significant government subsidies to upgrade its technology to electric arc furnaces for producing lower-emissions steel.
Potential Market Impact
If Sev.en were to succeed in a bid for British Steel and SSUK, it would potentially overtake Tata Steel as the largest steelmaker in the country, making Pavel Tykač a key player in UK industry. Tata is building an electric arc furnace at its Port Talbot site with £500 million of state support, following the closure of the south Wales plant's blast furnaces in 2024. Tykač, whose total fortune is estimated by Forbes at $8.9 billion (£6.5 billion), started as a computer distributor in the early 1990s before acquiring a series of coal power stations in the Czech Republic and forming the Sev.en energy group.
Svoboda, a former McKinsey consultant, said Sev.en Global Investments owns assets worth $3 billion. The company has acquired various fossil fuel assets, including coalmines in the US, Australia, and Vietnam to feed power generation and blast furnace steelmaking, as well as four gas-fired power plants in the UK under the InterGen brand. Sev.en has previously described its strategy as a "contrarian approach," betting that the transition away from polluting fossil fuels will be slower than other investors expect.
