According to the court decision, new administrators have been appointed to take control of Speciality Steels UK (SSUK), a Liberty Steel-owned facility in South Yorkshire. The company, which produces steel using scrap metal, has faced constant uncertainty due to mounting unpaid debts, putting it at risk of liquidation.
This comes after the government took control of the British Steel Mill in Scunthorpe earlier this year to prevent the closure of the country's last remaining primary steel plant. SSUK is home to the UK's largest electric arc furnace, known for its high energy efficiency and expected to play a key role in the energy transition of the steel industry.
However, the company has been experiencing financial difficulties for a long time. The collapse of Liberty Steel's main credit institution and mounting unpaid debts have left the company unable to purchase the scrap metal needed for steel production.
The fate of SSUK now depends on the judge of the High Court. Lawyers for Sanjeev Gupta, chairman of the board of GFG Alliance, the owner of Liberty Steel, warned that a potential liquidation order could mean the cessation of steel production at the plant. Gupta's legal team requested a postponement to allow the administrative process to be completed, and argued that this would avoid the need for direct government intervention.
The creditors' lawyers, however, submitted to the court a letter from the government, which contains guarantees that the steel mill can be transferred to management if necessary. Creditors who are owed hundreds of millions of pounds have gone to court demanding that the company be forcibly liquidated so that its assets can be sold to pay off debts.
The GFG Alliance, which operates in the energy, trade and steel sectors and employs thousands across the UK, has come under intense scrutiny following the collapse in 2021 of its main lender, Greensill Capital. Sources close to Gupta have confirmed that negotiations are underway with investment giant Blackrock to provide new financing for the acquisition of the company through a managed process known as "pre-administration."
Although the Government supports policies aimed at supporting the steel sector, it has repeatedly rejected Sanjeev Gupta's direct requests for financial assistance. As a result, we are faced with two difficult options: to allow Gupta to retain control of the company.,
