Ministers are examining potential measures to intervene and safeguard a major steel facility if its parent company faces administration following an upcoming court case.
The business secretary, Jonathan Reynolds, is assessing possible government support for Speciality Steel UK (SSUK), part of the Liberty Steel Group owned by Sanjeev Gupta, in case of closure after next week’s insolvency hearing.
Sources familiar with government discussions indicate that Reynolds has not dismissed the option of taking full control of the firm, which employs 1,450 workers at sites in Rotherham and Sheffield.
This would mark the second steel plant under state control following the government’s acquisition of the British Steel facility in Scunthorpe from its Chinese owners, though SSUK’s operations are considered more viable for a future sale.
A government spokesperson stated: “We are closely observing developments concerning Liberty Steel, including any public hearings, which remain the company’s responsibility.”
“Liberty must handle commercial decisions about its future, and we hope it can proceed sustainably.”
Local Labour representatives in South Yorkshire have urged Reynolds for weeks to provide additional backing for the plants, which have reported losses of £340 million over four years. Despite having the UK’s largest electric arc furnace, production at Rotherham has been stalled for a year due to insufficient funds for materials, though workers have continued to be paid.
Gupta, who resides in the United Arab Emirates, is struggling to maintain control of multiple businesses within his global GFG Alliance, which has faced financial strain since the 2021 collapse of Greensill Capital, GFG’s lender. Gupta has been in prolonged negotiations with Greensill’s administrators over repayment efforts.
Before the court hearing, Gupta sought investors for SSUK, informing union officials of advanced discussions with a major backer. Previous attempts to sell the company proved unsuccessful, according to court records.
A union spokesperson said: “Based on recent discussions, Liberty is reportedly in advanced talks with a potential investor. While we await details, concerns over SSUK’s future persist.”
“Should the court ruling worsen the situation, government intervention will be necessary to preserve jobs and critical infrastructure.”
Last month, Reynolds assured parliament that the government was closely observing SSUK’s situation, calling its workforce “a national asset” with a vital role in the country’s steel strategy.
Those familiar with his position say Reynolds opposes government funding while Gupta retains control but remains open to support measures if needed.
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