Hong Kong-listed GR Life Style in talks to buy historic steel trader Stemcor

Oct 06, 2023

A Hong Kong-listed company is in talks to buy Stemcor, the historic British steel trading group, amid pressure from its lenders to secure new ownership.

Sky News has learnt that GR Life Style, a property company, is the preferred bidder for Stemcor following months of talks with a series of potential buyers.

City sources said on Friday that a deal was not certain to materialise.

GR Life Style, which is a real estate developer and property manager, appears to have no historic link to the steel trading industry.

Stemcor, which was founded in 1951 by Hans Oppenheimer, a German immigrant to the UK who built it into an international powerhouse, is one of the world’s biggest players in its sector.

Since July last year, it has been owned by ShouYe Holdings, another Hong Kong-based entity.

However, its syndicate of lenders, which is understood to include HSBC and the Dutch bank ING, is said to have applied pressure to the company to seek new owners amid unspecified concerns about its ultimate ownership.

Dozens of banks are understood to have exposure to Stemcor owing to its substantial trading book.

GR Life Style has a market capitalisation of about HK$2.5bn, equivalent to roughly £265m.

The price that it would pay to acquire Stemcor was unclear on Friday.

Insiders said a number of UK-based investors had tabled rival offers to acquire Stemcor, which is understood to remain highly profitable.

While GR Life Style is not certain to strike a deal to buy the business, it is likely to do so, they added.

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Stemcor’s founder was the father of Dame Margaret Hodge, the veteran Labour MP.

Until the summer of 2022, it was part of Cedar Holdings Group, a mainland Chinese company which was reported last year to be struggling to repay its debts.

Stemcor ran into financial difficulty after the 2008 financial crisis, and was forced into a radical debt restructuring.

It was ultimately split into two companies, with the other – Moorgate Industries – principally comprising assets in India.

Dame Margaret, a long-standing critic of the tax avoidance tactics employed by multinational companies, was reported in 2015 to have been a beneficiary of the winding-up of a Liechtenstein foundation which held shares in Stemcor.

She said at the time that she had “paid all relevant taxes in full”.

Neither she nor any members of her family hold any residual interest in Stemcor.

Stemcor declined to comment on Friday.

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