The third-largest UK Steelworks has collapsed into government control, casting uncertainty over 1,500 workers in Rotherham and Sheffield. A High Court ruling ordered the compulsory winding up of Speciality Steels UK (SSUK), part of Sanjeev Gupta’s Liberty Steel empire. Creditors, owed hundreds of millions, argued the firm was “hopelessly insolvent.”
The Court Ruling
Judges found SSUK had only £600,000 in cash while facing a £3.7m monthly wage bill. The company’s parent group also had 15 entities already in insolvency across nine jurisdictions. As a result, control was handed to the official receiver, supported by consultants from Teneo.
Lawyers for Mr. Gupta had sought a four-week delay. They proposed a pre-pack administration, with backing from BlackRock and Fidera, to buy back the business. However, the court rejected the plan, warning it risked a “free fall” collapse.
Government Steps In
The government will now pay wages and cover plant costs while a buyer is sought. Education Secretary Bridget Phillipson stressed the importance of keeping primary steel-making in the UK. She said Labour’s forthcoming steel strategy would outline the long-term plan for the industry.
South Yorkshire mayor Oliver Coppard welcomed the intervention. He said it ended uncertainty for workers, but urged ministers to secure “the brightest possible future” for the plants.
Liberty Steel’s Position
Liberty Steel’s chief transformation officer, Jeffrey Kabel, expressed disappointment. He argued the company had invested heavily for a decade and was the best operator. He also noted BlackRock and other investors still supported Liberty’s efforts to buy SSUK back.
Union representatives voiced concerns. Chris Williamson, a worker at Rotherham for 25 years, said staff wanted guarantees on pay and pensions. He confirmed the plant had not produced steel since July 2024, with most workers on partial furlough at 85% wages. “We just want certainty and to start producing steel again,” he said.
Industry Context
The wider UK steel sector has struggled for years. Rising energy prices, cheap imports, and US tariffs under the Trump administration have weakened competitiveness. The collapse of Greensill Capital, Liberty’s main lender, also destabilized Gupta’s business empire.
Earlier this year, the government took over British Steel’s Scunthorpe plant to prevent closure by its Chinese owners. Analysts say these interventions highlight the “strategic imperative” of maintaining steel production, particularly for national defense.
Conclusion
The crisis at the UK Steelworks in Rotherham and Sheffield underscores deep challenges in Britain’s steel industry. While government control secures jobs for now, long-term survival depends on sustainable investment, clear strategy, and global competitiveness. Workers, unions, and regional leaders are united in one message: the UK must keep steelmaking alive.
