The decision, which puts nearly 1,500 jobs at risk, sees the government now responsible for the plant's operational costs and finding a new buyer.
The UK's third-largest steelworks, Speciality Steels UK (SSUK), has collapsed into government control, creating a precarious future for almost 1,500 workers across its Rotherham and Sheffield sites. The High Court granted a compulsory winding-up order sought by creditors, placing the company in the hands of the official receiver, a government-appointed liquidator, and special managers from the consultancy firm Teneo.
The move comes after a prolonged period of financial turmoil for the company, part of tycoon Sanjeev Gupta's Liberty Steel empire. The judge presiding over the case found that SSUK was "hopelessly insolvent," with only £600,000 in its bank account against a monthly wage bill of £3.7 million. The parent group itself has 15 entities undergoing insolvency proceedings across nine jurisdictions, compounding the company's fiscal woes.
In a last-ditch attempt to avert liquidation, Liberty Steel's lawyers had requested a four-week adjournment to execute a "pre-pack administration." This maneuver would have allowed Gupta to buy back the business with fresh funding from investment firms BlackRock and Fidera, a process that would have largely shed the company's substantial debts.
Jeffrey Kabel, Liberty Steel’s Chief Transformation Officer, expressed his disappointment, calling the court’s decision “irrational.” He argued that the move would “impose prolonged uncertainty and significant costs on UK taxpayers...despite the availability of a commercial solution.”
However, lawyers representing the creditors, which include investors owed money after the collapse of Liberty’s main lender, Greensill Capital, argued that a government-assisted sale would be a more transparent and beneficial process for the UK's steelmaking industry. Ryan Perkins, the creditors' lawyer, revealed to the court that third parties had already "expressed an interest" in returning the sites to steel production, which aligns with the government's stated objective. The government confirmed it would cover the ongoing wages and operational costs of the plant while the official receiver attempts to find a suitable buyer.
The workers at the factory site have revealed that the company has not produced steel since July 2024. They have been receiving only 85% of their pay for the past year.
The collapse of SSUK is yet another reminder of the dwindling steel sector of the country. Just months ago, the government had to intervene to prevent the Chinese owners of British Steel's Scunthorpe plant from closing its furnaces. The industry as a whole has been grappling with soaring energy prices, cheaper imports from overseas, and the lingering effects of trade tariffs.
The government still maintains that it is "committed to a bright and sustainable future" for UK steelmaking. However, the immediate challenge lies in navigating the complex liquidation process and securing a new owner for the Rotherham and Sheffield plants.
