Steel firm at risk of insolvency has a potential buyer

News of a possible buyer for a South Yorkshire-based steel company has fended off the threat of insolvency for now.

Speciality Steel UK (SSUK), which is part of the Liberty Steel Group founded by Sanjeev Gupta, employs 1,450 people and has operations in Rotherham and Sheffield.

Lawyers for SSUK, speaking at a High Court hearing today – 21 May – said “urgent meetings” had taken place with a “third party purchaser”.

Insolvency and Companies Court judge, Sebastian Prentis, adjourned a winding up petition for eight weeks until 16 July to allow time for a sale to progress.

Commenting after the hearing, Jeffrey Kabel, Liberty Steel chief transformation officer, told the BBC the court’s decision was a “positive development”. He said the company would use this time to “finalise options, including a sale of the business” while continuing its debt restructuring.

And he added: “We remain committed to finding the right solution that preserves EAF [electric arc furnace] steelmaking in the UK, a vital national asset serving strategic supply chains.

“We recognise that change is essential to set the business on a positive trajectory and provide certainty for our creditors, employees and stakeholders.”

He said SSUK would use the time afforded by the adjournment to engage in “intensive discussions” to achieve an outcome which “best serves the strategic interests of the business”.

The company has been involved in debt restructuring since the collapse of Greensill Capital in 2021, which was the main financial backer of Liberty Steel’s owner GFG Alliance.

However, earlier this week Roy Rickhuss, general secretary of steelworkers’ union Community, warned: “Our members at Liberty Steel have endured far too much turbulence and uncertainty over recent years as a result of the erratic and irresponsible way the company has been run.

“Failed restructuring plans and broken promises from the company have become a familiar, demoralising pattern, and things simply can’t go on as they are.

“Ever since the collapse of Greensill Capital, we have worked with the company in good faith, even when refinancing deadlines have been missed. Our patience has now run out.

“Liberty Steel’s plants are strategically important sites for the UK steel industry and the country as a whole, and these assets must be secured.

“New, responsible ownership is needed to give the business the brighter future it needs and deserves, and that can only be achieved with a decisive change at the top. Enough is enough – Sanjeev Gupta must invest in the business or step aside.”

Marie Tidball MP, Labour Member of Parliament for Penistone and Stocksbridge, added: “I have listened to my constituents in Stocksbridge and agree with them that it is time for Gupta to go. He has run out of road; his chaotic ownership must end now.

“Our Stocksbridge Speciality Steels site needs new, competent ownership to maximise its potential, so the business has a real chance for success.

“Stocksbridge Speciality Steels has strategically significant, highly specialist capability, to produce world-leading steel, crucial to our national defence, aerospace, and energy industries. The site employs 650 people and has an excellent skills training centre.

“I know the capability of the site, the extraordinary ability of the workforce and the exceptional quality steel produced in Stocksbridge.

“What we need now is a new owner to come forward and restore the glory of a site which has proudly made steel in our constituency for over 180 years.”