The UK’s third-largest steelworks, Speciality Steels UK (SSUK), has been placed under government control following a compulsory winding-up order authorized by insolvency courts. This decision affects nearly 1,500 employees located in Rotherham and Sheffield. The order was sought by creditors owed substantial debts, totaling hundreds of millions of pounds, and SSUK is part of the Liberty Steel group owned by Sanjeev Gupta.
As a result of this ruling, the Official Receiver and special managers from the consultancy firm Teneo will oversee the company’s operations on behalf of the liquidator. The government has committed to covering ongoing wages and operational costs while a prospective buyer is sought.
Liberty Steel has criticized the voluntary liquidation decision as “irrational.” Jeffrey Kabel, the chief transformation officer, noted that this move might lead to prolonged uncertainty for workers and additional costs for UK taxpayers related to settlements and expenses, despite potential commercial solutions being available.
Gupta’s legal team had requested a four-week delay to facilitate the possibility of a “pre-pack administration,” a process that allows an insolvent company to sell assets to a buyer. They aimed to secure funding from BlackRock and Fidera for a buyback of the business. His lawyers contended that the winding-up of the company could disrupt operations and negatively impact this significant steel manufacturer and its employees.
A judge determined that SSUK was “hopelessly insolvent,” indicating it had only £600,000 in its bank account against a monthly wage bill of £3.7 million. Additionally, Gupta’s parent group has 15 entities currently undergoing insolvency proceedings across nine different jurisdictions. The situation raises concerns about the stability of SSUK and its workforce.
Source: https://www.bbc.com/news/articles/cy0818y4jdlo?at_medium=RSS&at_campaign=rss