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Government takes control of UK’s third-largest steelworks after collapse into administration Government takes control of UK’s third-largest steelworks after collapse into administration
(30 minutes later)
State steps in to run Speciality Steel UK plants in South Yorkshire in bid to protect 1,450 jobs Court ends Sanjeev Gupta’s control of Speciality Steel UK’s operations in South Yorkshire as ministers seek to save 1,450 jobs
The government has taken control of the UK’s third-largest steelworks as ministers try to protect 1,450 jobs at Liberty Steel in South Yorkshire after the company collapsed into administration. The government has taken control of the UK’s third-largest steelworks as ministers try to protect 1,450 jobs after Liberty Steel’s operations in South Yorkshire were put into administration.
The high court in London said on Thursday that Speciality Steel UK (SSUK), which has plants in Rotherham and Stocksbridge, would be put into administration. The company was then placed under the control of special managers appointed by the government’s official receiver. The high court in London said on Thursday that Speciality Steel UK (SSUK), which has plants in Rotherham and Stocksbridge, would be placed into administration.
Justice James Mellor said: “It is quite clear that there are special managers lined up who have the support of the government. The company, previously part of the metals tycoon Sanjeev Gupta’s Liberty Steel group, was put under the control of managers appointed by the government’s official receiver.
“I consider by far the preferable approach is to make a winding up order.” The judge, James Mellor, said: “It is quite clear that there are special managers lined up who have the support of the government.
The business minister, Jonathan Reynolds, has previously described the steelworks and its workers as important strategic assets for the UK. “I consider by far the preferable approach is to make a winding-up order.”
The government has said that it has already received approaches from “independent third parties who have expressed an interest in returning some or all of the sites to steel making”, according to a letter from the Department for Business and Trade entered in court. The business minister, Jonathan Reynolds, has described the steelworks and its workers as important strategic assets for the UK.
The government also indicated that it hoped for a buyer who would restart production at Rotherham – where no products have been made for a year. However, it has said that it is not in negotiations over providing financing. The government has said it has already received approaches from “independent third parties who have expressed an interest in returning some or all of the sites to steel making”, according to a letter from the Department for Business and Trade entered in court.
It also indicated that it hoped for a buyer who would restart production at Rotherham, where no products have been made for a year. However, it has said it is not in negotiations about providing financing.
The development marks the second government intervention in the steel industry this year, after ministers took control of British Steel’s Scunthorpe plant, fearing that its Chinese owners would let the blast furnaces cool beyond repair.The development marks the second government intervention in the steel industry this year, after ministers took control of British Steel’s Scunthorpe plant, fearing that its Chinese owners would let the blast furnaces cool beyond repair.
Indian-born Gupta was once dubbed the “saviour of steel” for his plans to turn around struggling plants. From a business founded as a student at the University of Cambridge he built up a collection of assets spanning the UK, eastern Europe and Australia. Indian-born Gupta was once known as the “saviour of steel” for his plans to turn around struggling operations. From a business founded as a student at the University of Cambridge he built up a collection of assets spanning the UK, eastern Europe and Australia.
However, he had been scrambling to find new financing for his businesses since the collapse in 2021 of Greensill Capital, which had lent his Gupta Family Group (GFG) Alliance business about $4.5bn (£3.3bn). Administrators for Greensill are trying to recover that money on behalf of creditors, including the US lender Citibank, which is owed £233m.However, he had been scrambling to find new financing for his businesses since the collapse in 2021 of Greensill Capital, which had lent his Gupta Family Group (GFG) Alliance business about $4.5bn (£3.3bn). Administrators for Greensill are trying to recover that money on behalf of creditors, including the US lender Citibank, which is owed £233m.
GFG Alliance has also been under investigation by the UK’s Serious Fraud Office since 2021 over allegations of “fraud, fraudulent trading and money laundering in relation to the financing and conduct of the business”, including in relation to Greensill.
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Gupta, who is based in the United Arab Emirates, had already lost control of businesses in the UK, Europe, Singapore and Australia. However, SSUK is his key metals asset in the UK, where he also bought two large country estates.Gupta, who is based in the United Arab Emirates, had already lost control of businesses in the UK, Europe, Singapore and Australia. However, SSUK is his key metals asset in the UK, where he also bought two large country estates.
The tycoon’s lawyers had pushed for him to be allowed another month to try to pursue a “pre-pack” administration of the business, which would have enabled him to buy it out of insolvency while reducing its debts. The pre-pack administration was prepared by the insolvency consultancy Begbies Traynor and would have been funded by BlackRock, the world’s largest investment manager. Jeffrey Kabel, Liberty Steel’s chief transformation officer, said Gupta was in Sydney, managing GFG’s remaining Australian business. He said the case had left Gupta “sad, because he’s put a lot into this”.
However, creditors “have had enough” of waiting for Gupta to find new funding, after months of talks that never came to a formal agreement. Outside the courtroom after the judgment Kabel said he was “extremely disappointed”. “We are by far the best company to run this business. We’ve run this company for 10 years. We’ve put a lot of blood, sweat, huge amount of money into it.”
Gupta’s lawyers had pushed for him to be allowed another month to try to pursue a “pre-pack” administration of the business, which would have enabled him to buy it out of insolvency while reducing its debts. The pre-pack administration was prepared by the insolvency consultancy Begbies Traynor and would have been funded by BlackRock, the world’s largest investment manager.
However, creditors had “had enough” of waiting for Gupta to find new funding, after months of talks that never came to a formal agreement.