The British government has stepped in to take control of a major part of Sanjeev Gupta’s Liberty Steel operations after one of the country’s largest steel plants was declared insolvent in the High Court.
Judge Edward Mellor ruled that Speciality Steel UK was “hopelessly insolvent” and approved a compulsory liquidation request from creditors. At the same time, the court granted an application from the Official Receiver to appoint a special manager, with restructuring specialists Teneo now overseeing the business. The management costs will be funded by the Department for Business and Trade.
The government has agreed to cover operational costs and pay the salaries of around 1,500 employees in northern England to ensure an orderly process and prevent immediate shutdown.
The court also heard that Speciality Steel had not received any orders in the last three months and was described by one of Gupta’s advisers as “effectively mothballed.” The company reportedly had only £650,000 in its bank accounts, with a cash flow need of nearly £7 million in the coming weeks.
This ruling further weakens the GFG Alliance, Gupta’s international conglomerate, which has been under pressure since the 2021 collapse of its main lender, Greensill Capital. Several GFG companies are already in insolvency proceedings worldwide.
Although the government will not directly own Speciality Steel, it confirmed that it has already been approached by potential buyers. Officials stressed that the intervention was necessary to safeguard jobs and provide stability within the struggling UK steel sector.
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