The UK’s third-largest steelworks has been taken over by the government after a court ordered its compulsory winding up, raising fears for nearly 1,500 workers in Rotherham and Sheffield. The ruling against Speciality Steels UK (SSUK), part of Sanjeev Gupta’s Liberty Steel group, followed mounting debts worth hundreds of millions of pounds.
The decision means the steel business, which uses scrap metal to manufacture new products, is now under the control of an official receiver, a government-appointed liquidator, alongside special managers from a consultancy firm. The government confirmed it would cover wages and plant costs during the search for a buyer, offering temporary relief to employees facing deep uncertainty.
The High Court decision on Thursday came as a blow to Liberty Steel executives. Jeffrey Kabel, the company’s chief transformation officer, expressed his frustration, saying management had presented a strong case to continue running the plant. He argued that the company had invested over a decade of hard work, capital, and effort to keep operations stable.
Lawyers for Sanjeev Gupta attempted to secure a four-week adjournment, proposing a “pre-pack administration.” This would have allowed the insolvent firm to sell its assets quickly to new owners, possibly supported by fresh funding from investment groups such as BlackRock and Fidera, which specialize in distressed businesses. Gupta hoped this route could enable him to buy back the company and restructure its debts.
However, the judge described the company as “hopelessly insolvent,” pointing out that SSUK held only £600,000 in cash against a monthly wage bill of £3.7 million. The court also noted that the wider Liberty Steel parent group was facing insolvency proceedings across multiple countries, making the business unstable.
Lawyers representing the creditors argued that winding up the company was the most practical route to safeguard the future of the UK steel industry. They claimed that an independent process led by government-appointed managers would be more transparent and better protect national interests than allowing administrators linked to Gupta to oversee the sale.
The financial collapse stems from the downfall of Greensill Capital, Liberty Steel’s main lender, whose failure left billions in unpaid debts to global investors. That collapse rippled through the company’s structure, leaving many of its subsidiaries, including SSUK, in severe financial distress.
Gupta’s plan to place the company into administration and immediately buy it back would have allowed him to shed significant portions of debt, a strategy that creditors strongly opposed. They insisted that an independent sale process was necessary to prevent further losses and secure stability in the steel sector.
Despite the ruling, Liberty Steel executives said they remained hopeful that they could regain control of SSUK. Kabel pointed to backing from potential financiers like BlackRock as a sign that a deal could still be reached to rescue the business and preserve jobs.
The crisis highlights the ongoing struggle of the UK steel industry, which has been under pressure for years from global competition, rising energy costs, and lack of investment. Workers at the affected plants now face an anxious wait while the government and special managers seek potential buyers willing to take on both the facilities and the workforce.
For the communities of Rotherham and Sheffield, the steelworks has long been a cornerstone of local employment and identity. Its future now hangs in the balance, as employees, creditors, and government officials attempt to chart a path forward in one of Britain’s most high-profile industrial battles.
