Government Prepares to Intervene in Liberty Steel's South Yorkshire Operations Amid Financial Crisis
Published 20 August 2025
Highlights
- The UK government is poised to take over Speciality Steels UK (SSUK) to protect 1,500 jobs amid financial turmoil.
- SSUK, owned by Liberty Steel, faces a winding-up order due to unpaid debts, with a High Court decision pending.
- Sanjeev Gupta, head of GFG Alliance, seeks a "pre-pack" administration to retain control, but creditors demand liquidation.
- The government has prepared special managers to run SSUK if it enters administration, marking its second steel industry intervention this year.
- Gupta's financial struggles follow the 2021 collapse of Greensill Capital, GFG's main lender, complicating fundraising efforts.
The UK government is gearing up to take control of Speciality Steels UK (SSUK), the nation's third-largest steelworks, in a bid to safeguard 1,500 jobs and stabilize the troubled steel industry. This potential intervention comes as SSUK, owned by Liberty Steel, faces a winding-up order due to mounting unpaid debts, with a crucial High Court decision expected soon.
Financial Turmoil and Legal Proceedings
SSUK, which operates in South Yorkshire, has been grappling with financial instability, exacerbated by the collapse of Liberty Steel's main lender, Greensill Capital, in 2021. The company's inability to procure necessary scrap metal for steel production has further strained its operations. The High Court is set to determine the fate of SSUK, with creditors pushing for liquidation to recover hundreds of millions of pounds owed.
Government's Preparedness and Strategic Moves
In response to the looming crisis, the UK government has lined up special managers to oversee SSUK's operations should it enter administration. This move underscores the government's readiness to step in, marking its second intervention in the steel industry this year, following the takeover of British Steel's Scunthorpe plant. A letter from the Department for Business and Trade presented in court confirmed the government's preparedness to manage a sales process if necessary.
Sanjeev Gupta's Efforts to Retain Control
Sanjeev Gupta, executive chairman of GFG Alliance, is actively seeking a "pre-pack" administration to maintain control over SSUK. This approach would allow the company to be sold without direct government intervention. However, creditors remain firm in their demand for liquidation, complicating Gupta's efforts to secure new funding and navigate the financial challenges facing his businesses.
Broader Industry Challenges
The steel industry has been hit hard by the COVID-19 pandemic and increased competition from Chinese metal producers, adding to the financial woes of companies like SSUK. Additionally, GFG Alliance is under investigation by the UK's Serious Fraud Office for suspected fraud, further complicating fundraising efforts.
What this might mean
The High Court's impending decision will significantly impact the future of SSUK and the broader UK steel industry. If the government assumes control, it could stabilize operations and preserve jobs, but may also set a precedent for further state intervention in private enterprises. Conversely, if Gupta retains control through a "pre-pack" administration, it could offer a lifeline for Liberty Steel, though it may not fully address the underlying financial issues. The outcome will likely influence investor confidence and shape the government's approach to managing industrial crises in the future.
