Sanjeev Gupta is preparing a last-ditch attempt to save the remaining arm of his Liberty Steel business as government officials step up planning for a collapse of the business within days.
Gupta is understood to have spent the weekend planning an 11th hour rescue deal to save the company’s Speciality Steels UK (SSUK) division days before a courtroom showdown with its creditors on Wednesday.
The metals magnate hopes to secure a pre-pack administration deal that would allow the company to ditch its debts and other liabilities before being bought back by Gupta or parties connected to him.
The plan is likely to raise eyebrows in Whitehall where government officials are reportedly planning for a collapse of the heavily indebted steel division, while fraud investigations into other areas of Gupta’s business empire remain open.
A Liberty Steel spokesperson said discussions are ongoing to finalise options for SSUK that “best serve the interests of creditors, employees and the broader community”.
The restructuring specialist Begbies Traynor is working on the pre-pack deal, according to Sky News, which first reported the plans, but any deal would need Liberty Steel’s creditors, including the British tax authority HM Revenue and Customs (HMRC) and Swiss lender UBS, to agree to write off potentially hundreds of millions of pounds of debt.
Gupta has limited time to finalise any attempt to rescue his subsidiary before an expected court hearing on Wednesday relating to a winding-up petition, that was issued by a supplier over unpaid debts.
Government officials have reportedly stepped up planning for the collapse of SSUK if the winding-up petition is approved this week, according to Sky. The hearing, which has already been deferred several times, could force SSUK into compulsory liquidation, leaving a court-appointed official receiver to run the business.
SSUK is the UK’s third-largest steel producer and employs nearly 1,500 people. The South Yorkshire-based business includes an electric arc furnace at Rotherham, plus steelworks in Stocksbridge, near Sheffield, making steel for the car industry, as well as for use in construction and engineering.
Financial pressure has been mounting on Gupta’s metals and energy companies stretching from Australia through Singapore and Romania to northern England, known as the GFG Alliance.
The group has been in trouble since the 2021 failure of Greensill Capital, which collapsed after lending GFG about $5bn (£3.7bn). Gupta has been engaged in long-running talks with the administrators of Greensill, who are trying to recover the money.
GFG has been under investigation by the UK’s Serious Fraud Office since 2021 in relation to the Greensill financing. The company and Gupta have denied any wrongdoing.
Gupta is also being prosecuted by Companies House over the failure to file accounts for more than 70 UK businesses – including those of Liberty Pipes, based in Hartlepool. He has pleaded not guilty.
Some industry figures have said they expect the government to step in to ensure the plants keep running if they fall into liquidation – although it is not thought that the government will give financial support to Gupta’s companies.
A spokesperson at the Department for Business said: “We continue to closely monitor developments around Liberty Steel, including any public hearings, which are a matter for the company.”
Continued financial pressures on Gupta’s companies have followed years of difficulty for the wider UK steel industry. British steel production fell to its lowest level since the 1930s in 2024, and the government in effect took over the British Steel blast furnaces at Scunthorpe in April, amid fears of more than 2,700 job losses and the end of primary steel-making in the UK.