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The UK government is making preparations to take control of the country’s third-largest steelworks in an effort to save the business and safeguard 1,500 jobs. Speciality Steels UK (SSUK) in South Yorkshire, owned by Liberty Steel, is facing an uncertain future due to mounting unpaid debts, which could lead to its closure. This move follows the government’s earlier intervention to take over British Steel in Scunthorpe to prevent the closure of the last UK plant producing virgin steel.
SSUK houses the UK’s largest electric arc furnace, crucial for the industry’s energy transition due to its energy efficiency. The company has been grappling with financial difficulties as its main lender collapsed, causing unpaid debts to accumulate. A High Court judge will soon determine the fate of SSUK, with lawyers for Sanjeev Gupta, executive chairman of GFG Alliance, seeking an adjournment to complete an administration process or sell the company without government intervention.
Creditors, owed hundreds of millions of pounds, have petitioned the court to force the company into liquidation to enable the sale of Liberty Steel’s assets for debt repayment. Negotiations with investment giant Blackrock are ongoing to provide new funding for a possible buyout of the business out of administration. The uncertainty surrounding the company’s future post-liquidation has raised concerns for stakeholders, and the case has been adjourned and referred to the High Court for further deliberation.
While the government supports the steel industry, it has declined repeated requests for direct support from Mr. Gupta, leading to unappealing choices for all parties involved. The government is closely monitoring developments around Liberty Steel and has expressed a commitment to support the Official Receiver in case of compulsory liquidation. Both Liberty Steel and the government are aiming for the best outcome for the business, employees, and stakeholders while managing costs and minimizing uncertainties
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