A TROUBLED steel plant which employs dozens of Barnsley workers has been placed under government control due to spiralling debts just two years since it was given a last-minute bailout.
Insolvency courts granted a compulsory winding up order sought by creditors owed hundreds of millions of pounds by Speciality Steels UK (SSUK) part of the Liberty Steel metals empire of controversial tycoon Sanjeev Gupta.
The company, which uses scrap metal to manufacture steel, will now be placed in the hands of the official receiver a government-appointed liquidator and bosses from consultancy firm Teneo.
A winding-up judge found the firm was ‘hopelessly insolvent’ with £600,000 in the bank, a monthly wage bill of £3.7m, supported by a parent group that has 15 entities in insolvency proceedings across nine jurisdictions.
The government has agreed to cover the ongoing wages and costs of the plant while a buyer is sought.
Penistone and Stockbridge MP Marie Tidball said: “I have been fighting for steel since day one and I understand that this time will be causing worry and uncertainty for steelworkers and their families.
“I called for Gupta to go months ago he has finally run out of road.
“Whether it’s paying wages late or employees not receiving pension contributions, Liberty’s Speciality Steel UK has failed its workers.
“Consequently, after months of uncertainty and continued adjournments, it’s positive that that the government has taken control of the UK’s third-largest steelworks to try to protect our 1,450 jobs after Liberty Steel’s operations here collapsed into administration.
“The government’s intervention means that the sites are under the control of special managers, appointed by the government’s official receiver.
“I will also continue to seek reassurances about what will happen with workers’ pension contributions, from the last 12 months, which have not yet been paid across to Aviva.
“I am aware that the government are working closely with the pensions regulator to find a solution to this issue as quickly as possible.
“I know that steelworkers and other employees will have a number of queries about what happens next, and I will continue to work closely with Community Union around ongoing job security.
“It is reassuring to hear that the Secretary of State for Business, Jonathan Reynolds, has described our steelworks and its workers as important strategic assets for the UK, and wants them to have a strong future as part of the UK’s overall steel strategy.”
Lawyers for Mr Gupta had applied for a four-week adjournment for time to place the company in a ‘pre-pack administration’, court papers show, which allows an insolvent company to sell its assets to a bidder.
Winding up the company, his lawyers argued, could place the business in ‘free fall’ and incur significant disruption, cost and risk to ‘a nationally-important steel company and its staff’.
Ms Tidball added: “I want to thank all our local steelworkers and their families for all their hard work and patience throughout this difficult process.
“If any steelworkers would like to get in touch with me, please email me at marie.tidball.casework@parliament.uk.
“The government have committed £2.5bn to secure the UK steel industry and have always been clear that there is a bright future for steel in the UK.
“Our steelworks has been the beating heart of our community for nearly 200 years, and I will continue to fight to protect our site, our jobs and the strategic capability our site can offer.”
