Sanjeev Gupta is making a final effort to save the struggling Speciality Steels UK (SSUK) division of his Liberty Steel business, as government officials prepare for a potential collapse of the company. Gupta has reportedly spent the weekend devising a rescue plan ahead of a critical courtroom hearing scheduled for Wednesday, where creditors will assess the future of the division.
The proposed strategy involves a pre-pack administration deal, which would allow SSUK to eliminate its debts before being repurchased by Gupta or related parties. This plan has raised concerns among government officials, who are reportedly bracing for the possibility of SSUK’s demise. A spokesperson for Liberty Steel stated that discussions are ongoing to finalize options that would “best serve the interests of creditors, employees, and the broader community.”
Gupta’s efforts come at a critical juncture, as the company faces mounting pressures. According to Sky News, the restructuring firm Begbies Traynor is involved in the proposed pre-pack deal. However, any agreement would require the approval of Liberty Steel’s creditors, including the British tax authority, HM Revenue and Customs (HMRC), and Swiss lender UBS, who may need to agree to write off hundreds of millions of pounds in debts.
With a court hearing looming, Gupta has limited time to solidify his plan. The hearing addresses a winding-up petition filed by a supplier over unpaid debts. If approved, this could lead to compulsory liquidation, placing SSUK under the control of a court-appointed official receiver. SSUK is the UK’s third-largest steel producer, employing nearly 1,500 people and operating facilities in Rotherham and Stocksbridge, where it produces steel for the automotive and construction industries.
The financial troubles faced by Gupta’s GFG Alliance have extended across multiple countries, from Australia to Romania and northern England. The group has struggled since the 2021 collapse of Greensill Capital, which had lent GFG approximately $5 billion (£3.7 billion). Gupta is currently engaged in lengthy negotiations with Greensill’s administrators, who are attempting to recover the funds.
In addition to these financial challenges, Gupta’s business practices are under scrutiny. The UK’s Serious Fraud Office has been investigating GFG since 2021 in connection with the Greensill financing. Gupta and his companies have denied any wrongdoing. Furthermore, he is facing prosecution by Companies House for failing to file accounts for over 70 UK businesses, including Liberty Pipes in Hartlepool, to which he has pleaded not guilty.
Rumors suggest that the UK government may intervene to keep SSUK operational if it enters liquidation, although it is unlikely that any direct financial assistance will be provided to Gupta’s companies. A spokesperson from the Department for Business indicated that they are closely monitoring the developments surrounding Liberty Steel and any public hearings related to the case.
The ongoing financial strain on Gupta’s enterprises reflects broader challenges facing the UK steel industry, which has experienced significant declines. British steel production reached its lowest levels since the 1930s in 2024, prompting the government to take control of the British Steel blast furnaces in Scunthorpe amid concerns of over 2,700 job losses and the potential cessation of primary steelmaking in the UK.
As Gupta seeks to navigate this precarious situation, the outcome of the upcoming court hearing will be pivotal for the future of Liberty Steel and its workforce.
