LONDON (Reuters) -The British government said it will take control of a part of Liberty Steel, owned by commodities tycoon Sanjeev Gupta, after the business was placed into liquidation following a petition from its creditors on Thursday.
A judge at London’s High Court approved the petition for Yorkshire-based Speciality Steel UK, one of Britain’s largest steelworks, to be placed into compulsory liquidation, describing the business as “hopelessly insolvent”, the BBC reported.
The government would cover the ongoing costs of the business while it tries to find a buyer, the report added.
The business, which employs 1,450 people and produces steel used in aerospace, defence and power generation, will be placed under a government-appointed liquidator and managers from consultancy Teneo, the government’s Insolvency Service said.
The government’s takeover of the business marks its second intervention in the industry following its move to take control of British Steel’s loss-making Scunthorpe plant in April.
Liberty Steel is part of Gupta’s family conglomerate, GFG Alliance, which has been refinancing its businesses in steel, aluminium and energy after its backer, supply chain finance firm Greensill, filed for insolvency in 2021. It also has operations in other parts of Europe, Australia and the United States.
The company said the court’s decision was “irrational” and that the plan it had presented would have secured new investment into the steel industry.
“Liquidation will now impose prolonged uncertainty and significant costs on UK taxpayers,” Liberty Steel Chief Transformation Officer Jeffrey Kabel said in an emailed statement.
The government said it was committed to supporting the steel industry.
“We know this will be a deeply worrying time for staff and their families, but we remain committed to a bright and sustainable future for steelmaking and steel making jobs in the UK,” a government spokesperson said.
(Reporting by Sachin Ravikumar; Editing by Susan Fenton)
