Government poised to step in as sanjeev gupta fights for rotherham steelworks jobs

The future of Britain’s third largest steelworks hangs in the balance, as government officials prepare to take over operations in a dramatic bid to protect 1500 jobs at Sanjeev Gupta’s Rotherham-based Liberty Steel. The High Court was told that the government’s official receiver stands ready to act as administrator should Gupta’s team fail to secure a £75 million rescue deal with US investment giant BlackRock.

This potential intervention marks the latest challenge faced by Sanjeev Gupta, the entrepreneur once hailed as the saviour of steel. In the past decade, he rapidly expanded an industrial empire across three continents, using alternative funding sources like Greensill Capital. However, the 2021 collapse of Greensill and subsequent downturn in the steel market has left much of his business in disarray. Australian facilities are already in administration, most European operations have been sold and several UK mills remain mothballed.

The increasing cost of supporting Britain’s steel industry is becoming a familiar theme. Earlier this year, the government took control of Chinese-owned British Steel to prevent the closure of Scunthorpe’s blast furnaces, and last September handed a £500 million funding package to Tata Steel for its planned electric-arc furnace in Wales.

During the most recent court proceedings, the Department for Business and Trade confirmed it is prepared to oversee Liberty Steel’s UK operations if necessary, but emphasised that no decision has been taken regarding full state ownership. The department stated that an orderly compulsory liquidation could be the most practical way to revive steel production at these sites, with independent groups already expressing interest in taking over and restarting operations.

Creditors of Liberty’s SSUK unit, owed substantial sums in the wake of Greensill’s demise, are seeking to force the company into liquidation. The court heard that SSUK has only £650,000 in the bank, against a monthly wage bill of £4 million, and that Citibank alone is owed £233 million. Gupta aims to pre-empt compulsory liquidation by securing fresh funding from BlackRock and executing a management buyout with the help of turnaround specialists at Begbies Traynor.

Preserving Liberty’s electric-arc furnace in Rotherham aligns with Labour’s plans for lower-carbon industrial processes, as the site uses recycled steel and could be powered by renewables. Gupta’s camp insists that a private sector solution, backed by major investment, is preferable to a costly taxpayer bailout. The court, meanwhile, has postponed a decision on winding up SSUK, with Judge Sally Barber requesting more information before proceeding. All eyes now remain fixed on the future of the plant, the workforce and UK industrial policy as key players await the next court hearing.