Steelmakers and private equity are working on proposals for only parts of the collapsed British Steel pending a June 12 deadline for binding bids, sources close to the process said.
None of the potential buyers, which include GFG Alliance and former owner Greybull, would be willing to take on the whole company even for a nominal sum, due to the need for capital expenditure to make it profitable after years of underinvestment, the sources added.
British Steel, the country's second largest steel producer, was put into compulsory liquidation on May 22, jeopardising 25 000 jobs, including 5 000 in Scunthorpe, northern England.
The company produces high-cost long steel products used in construction and rail networks.
Steelmakers in Britain pay some of the highest green taxes and energy costs in the world, and face high labour costs and business rates.
GFG Alliance, a privately held conglomerate led by Sanjeev Gupta, is likely to make an offer for operations that have synergies with their existing steel assets in the region and the more profitable ones, a second source said.
GFG, via its Liberty House unit, bought Scunthorpe-based Caparo Merchant Bar, which produces steel bars for construction, energy and infrastructure, from the administrators in 2017.
GFG Alliance declined to comment.
Greybull Capital, which paid former owners Tata Steel a token one pound for the company three years ago, is interested in buying British Steel's operations in France and the Netherlands, which specialise in rail, wire and processing, one of the sources said.
"We will explore all options to help the company find the best sustainable solution for the good of its employees, customers and all involved," Greybull told Reuters in an emailed comment.
British Steel's advisor EY has also reached out to other European steelmakers, including Italy's Marcegaglia Group, AFV Beltrame Group and Acciaierie Venete, but also international players such as India's JSW Group and Posco Steel, two of the sources said.
Private equity firm Endless, which was a bidder for the steel assets at the time of the Greybull takeover, is also likely to make a proposal, they said.
One source added that it was unclear whether some of these parties will bid. Marcegaglia will not bid as it does not see synergies with the British producer, a source close to the company said.