The UK government is exploring emergency options to save Speciality Steel UK (SSUK), a major South Yorkshire steelmaker employing more than 1,400 people, as fears mount it could collapse into administration following a critical court hearing next week.
Business Secretary Jonathan Reynolds is said to be actively considering contingency plans, including the possibility of taking the company into public ownership if its parent, Liberty Steel, fails to secure new funding or a buyer. The move would mark the second time in recent weeks the government has taken control of a major UK steel plant, following its intervention at British Steel’s Scunthorpe works.
SSUK, which operates sites in Rotherham and Sheffield, is part of Sanjeev Gupta’s GFG Alliance – a global industrial group that has faced financial turmoil since the 2021 collapse of its main lender, Greensill Capital. Liberty has produced no steel at Rotherham for more than a year due to cash shortages, despite housing the UK’s largest electric arc furnace. The company has, however, continued to pay staff.
Gupta, who is based in the UAE, remains in protracted negotiations with Greensill administrators and is also the subject of a Serious Fraud Office investigation, which began in 2021, into suspected fraud and money laundering. GFG Alliance denies any wrongdoing.
According to court filings, previous attempts to sell SSUK have failed, but Gupta has told unions he is in “advanced talks with a major investor” ahead of the insolvency hearing. A union source said they were still awaiting details of the potential deal but warned that if the company enters administration, ministers must act to protect jobs and strategic assets.
Community union, which represents many Liberty staff, said: “Should the worst happen next week, the government will need to step in to protect jobs and the strategically important assets.”
Reynolds has previously told Parliament that SSUK’s workers were “a national asset” and part of the UK’s wider steel strategy. Officials close to the Business Secretary say he has ruled out injecting government funds while Gupta remains in control of the business, but would be open to support if the company enters administration.
One option under consideration would mirror the government’s approach at British Steel in 2019, when an official receiver kept the business running while a buyer was sought. In Liberty’s case, officials believe a sale would be more straightforward because its electric arc furnaces are cleaner and more cost-efficient than traditional blast furnaces.
A Liberty Steel spokesperson said the company was still hopeful of securing a future for the business: “Speciality Steel remains a valuable business with strong demand, particularly in aerospace, defence and energy. Our plan has always been to keep Speciality Steel going and to run it well.”
GMB national secretary Andy Prendergast added: “GMB strongly supports government intervention to maintain operations whilst a sustainable plan is found for this crucial player in one of our key industries.”
The situation presents an early test of the new Labour government’s industrial strategy and its commitment to preserving strategically important British manufacturing. With SSUK having lost £340 million in the past four years, ministers will be under pressure to act decisively to avoid mass job losses in a politically sensitive region.
Sources within government say the plants’ high-grade, lower-carbon steel production fits with the UK’s broader economic and environmental goals – and could make SSUK an attractive proposition for future investors, once control passes from Gupta.
With the insolvency hearing scheduled for Wednesday, the coming days will prove critical. If no private funding or buyer materialises, the government is expected to act quickly to prevent the collapse of one of the UK’s few remaining specialist steelmakers.
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