One of the UK’s last remaining steel companies has been pushed into compulsory liquidation – and will fall into government control. Speciality Steels UK (SSUK), part of the Liberty Steel empire owned by metals tycoon Sanjeev Gupta, employs nearly 1,500 people at sites in Rotherham and several other locations across South Yorkshire. Behind Tata Steel and British Steel, it is the third-largest steel producer in the country. Sky News reported that negotiations had been underway for a deal to rescue the firm, however, they seem to have been rendered unsuccessful.
The government-run Insolvency Service confirmed it will be acting as the liquidator, with Teneo Financial Advisory Limited assisting in running the company from now on. While the GFG Alliance expressed disappointment at the decision, local politicians and unions are highly critical of the group. The collapse of Speciality Steel UK (SSUK), the UK’s third-largest steel producer, did not come as a surprise to government officials who had been planning for this outcome. The business had been struggling due to financial mismanagement and a mounting debt pile, exacerbated by the collapse of Greensill Capital, its main lender, with outstanding loans to GFG.
SSUK’s creditors pushed for the company’s liquidation, prompting the government to step in. The government has no intention to own SSUK, but will cover wages and costs for the time being, hoping to find a new buyer soon. Financial assistance was not provided to SSUK by the government due to its existing financial and corporate challenges. GFG’s chief transformational officer, Jeffrey Kabel, expressed disappointment at the decision to push SSUK into compulsory liquidation, highlighting the potential for new investment and job protection.
Despite challenges, GFG has invested significantly in the UK economy, aiming to lead SSUK into the future. Sarah Champion, the Labour MP for Rotherham, criticized GFG for mismanagement, while Charlotte Brumpton-Childs of the GMB union sees an opportunity for the UK government to protect the vital UK steel industry. The government remains committed to a sustainable future for steelmaking, ensuring employees are paid and local communities are supported by the independent Official Receiver.
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