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The British government is set to take over the running of a major part of Sanjeev Gupta’s Liberty Steel business, after one of the UK’s largest steelworks was declared insolvent in London’s High Court.
Judge Edward Mellor approved an application from Yorkshire-based Speciality Steel UK’s creditors to place the business into compulsory liquidation on Thursday, describing it as “hopelessly insolvent”.
The ruling paves the way for the government’s Official Receiver to appoint a special manager to oversee the business and prevent a disorderly liquidation.
Restructuring advisory firm Teneo will act as the special manager of Speciality Steel, with its costs funded by the Department for Business and Trade, according to documents filed with the High Court.
The court heard that the government will continue to fund Speciality Steel’s operations and pay the salaries of its nearly 1,500 employees, which are based across several sites in the north of England.
The court also heard evidence that one of Gupta’s own advisers had described the business as “effectively mothballed”, with no customers placing orders for the last three months.
This is a developing story
