More rough seas for the UK steel industry as Speciality Steels UK (SSUK) falls under government control, with just £600,000 in the bank
Speciality Steels UK is the third largest UK steelworks with around 1,500 workers across Rotherham and Sheffield.
A compulsory winding-up order was granted by the insolvency courts, with the company owing hundreds of millions to creditors.
The government will covernwages and running costs for now
A buyer is being sought to take the company from the current owner, Sanjeev Gupta, head of the Liberty Steels group.
Lawyers of the Liberty Steels group had tried to argue against a winding-up order, instead asking for a four-week adjournment to seek investment from BlackRock and Fidera, an angel investor company.
However, in light of the parent company also having another 15 entities in insolvency proceedings, the lack of funds, and a high wage bill, the court found the company “hopelessly insolvent”, and so the winding-up order was given.
It is hoped that the selling off of Speciality Steels UK will help to maintain a hopeful outlook for UK steelmaking. Steel is critical for the construction and defence industries. In construction, it is used as a skeleton for buildings, infrastructure, and more. Network Rail has recently launched a steel framework worth £240m for building and maintenance of overhead lines.
The UK steel industry has been on a downward turn for some time now, due to higher energy costs, being undercut by low prices for imported steel, and, more recently, Donald Trump’s 25% tariffs on exports.
A spokesperson of the GMB Union described the decision as “another tragedy for UK steel”.
A rough time for UK steel
In April, the government passed an emergency bill in just seven hours, titled the Steel Industry (Special Measures) Act, as British Steel (at the time owned by Jingye) was forced to admit it was losing £700,000 per day.
Due to the bill, British Steel’s board and staff is now under the control of the business secretary, Jonathan Reynolds, who hopes that the company can be salvaged as another leading producer of steel in the company.
At the time, John Foster, chief policy and campaigns officer at CBI, said: “The government’s decision to take control of British Steel is a necessary outcome of last resort needed to preserve the UK’s primary steel production capability.
“With the government’s Growth Mission focused on delivering big infrastructure projects to drive economic growth, the UK mustn’t lose vital steelmaking capabilities. Looking beyond today, securing a sustainable future of steelmaking must also ensure that it is supported in the transition towards electric.
“In a period of global instability, it is increasingly important for our resilience that we have the capability within the UK to provide the steel that we need and that isn’t subject to the volatile backdrop provided by tariffs.”
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