2,000 jobs at risk at speciality steel business
A winding up petition has been issued against Speciality Steel UK Limited, which is a division of Sanjeev Gupta’s Liberty Steel, putting about 2,000 jobs at risk.
The speciality steel unit supplies the aerospace and oil and gas sectors, and is based at sites in Stocksbridge and Rotherham.
Gupta’s GFG Alliance, the owner of Liberty Steel, was forced into a financial restructuring last year after its key lender, Greensill Capital, collapsed, and in May last year confirmed the sale of certain assets including its aerospace and special alloys steel business in Stocksbridge.
According to reports, the petition against Speciality Steel UK Limited was issued by HMRC on Tuesday and is expected to be heard in late March and could force the business into insolvency.
A spokesman for GFG Alliance, Liberty Steel’s parent company, said: “Our priority has been to protect thousands of jobs in the UK.
“We are committed to repaying all our creditors and continue to work with all stakeholders around the UK to create a sustainable future for our businesses following the collapse of Greensill Capital.”
The Community, Unite and GMB unions, who represent the steel industry, released a joint statement, which warns: “This action by HMRC threatens thousands of jobs and is a devastating blow to our members and their families.
“Liberty Steel is a strategically important business, crucial to delivering net zero, and under no circumstances can our plants be allowed to close.
“The best route to protect jobs and repay HMRC and other creditors would be to enable the business to continue to trade.”
GFG Alliance has said it is contending with a difficult backdrop, due to record high energy prices driving up overheads, but that it remains in dialogue with its creditors, including HMRC, to find a solution.
A spokesman for the Department of Business, Energy & Industrial Strategy said: “The Government is closely monitoring developments around Liberty Steel and continues to engage closely with the company.
“As always, we stand ready to support their dedicated employees and their families affected by any developments.
“We have provided extensive support to the steel sector as a whole to help with the costs of electricity and are working with them to support their low carbon transition.”
The government previously rejected a request from GFG to approve an emergency £170m bailout.
Gupta received the moniker the “Saviour of Steel” when he saved jobs and assets with the purchase in 2017 from Tata Steel. However in April Tata was reported to be suing Liberty Steel over missed payments that were part of the £100m takeover deal.
This along with the collapse of Greensill has led to a turbulent period for GFG Alliance, a collection of businesses and investments owned by Gupta and his family, with the Serious Fraud Office announcing in May the business was the focus of an investigation.
The agency said it was looking into “suspected fraud, fraudulent trading and money laundering in relation to the financing and conduct of the business of companies within the Gupta Family Group Alliance”.
This investigation was also followed in November by the news that French prosecutors confirmed were investigating Gupta’s business dealings.
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