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BBC reporter Simon Jack has recently revealed that the government has taken control of the third-largest steelworks in the UK, affecting nearly 1,500 workers in Rotherham and Sheffield. Speciality Steels UK (SSUK), a part of Sanjeev Gupta’s Liberty Steel metals empire, faced a compulsory winding up order from insolvency courts due to debts amounting to hundreds of millions of pounds. The company is now in the hands of the Official Receiver and special managers from consultancy firm Teneo.
Amidst the uncertainty surrounding the steelworks’ future, the government has stepped in to cover ongoing wages and costs while a buyer is sought. Liberty Steel has expressed their disapproval of the decision to place the firm into compulsory liquidation, deeming it “irrational”. Chief transformation officer Jeffrey Kabel highlighted the potential long-term uncertainty and costs that could burden UK taxpayers, despite possible commercial solutions.
Legal proceedings showcased arguments from both sides, with lawyers for Mr Gupta suggesting a pre-pack administration to sell assets and potentially save the business. However, the judge determined that the company was severely insolvent with minimal funds and ongoing financial obligations. Creditors like Ryan Perkins from Greensill Capital advocated for a different approach, suggesting that government-assisted sale of assets would better serve the UK steel-making industry. Discussions also revealed third parties expressing interest in reviving steel production at the sites, aligning with the government’s desire for an orderly compulsory liquidation to potentially restart steel-making.
This development marks a significant shift in the steel industry landscape, raising questions about the future of UK steel production and the fate of workers at the affected steelworks. The involvement of the government in managing the liquidation process reflects a broader concern for the national importance of maintaining steel production capacity in the country. As stakeholders navigate through this turbulent period, the outcome of these proceedings will undoubtedly have far-reaching implications for the industry and the workforce involved
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