Government controls Rotherham Steel plants in Sanjeev Gupta to save 1,500 jobs
The government has controlled Sanjeev Gupta’s largest steel production business in a dramatic intervention, which has allowed it to oversee more than half of the UK’s steel industry.
The formal recipient stepped into the Rotherham Steel Works in South Yorkshire after the High Court approved a liquidation petition for creditors. The ruling imposes Gupta’s specialty steel (SSUK) in the government, which adds the prospect of closure of a factory employing 1,500 workers and is one of the few “green” arc furnaces in the UK.
The Labor government said it took action to maintain work and stabilize production, but the move came at a huge price. The site’s monthly salary totals £4 million, meaning taxpayers will fund tens of millions of pounds of operating expenses until bankruptcy expert Teneo can secure private buyers. The official recipient is an independent department of the government, and he stresses the intention to recover these fees through the final sale.
The decision deepened the state’s role in steel manufacturing after taking over British steel from Chinese owners in April and provided a £500 million subsidy for Tata Steel’s green transition in Wales. Now, more than half of the UK’s annual steel production of 5.6 million tons is operated by the state.
Joint Secretary-General Sharon Graham said that if no suitable buyers appear, ministers must be prepared to operate SSUK indefinitely. “If you can’t find a suitable buyer, then the government should be ready to run the company itself and make sure it is ready to meet future challenges,” she said.
Community, the Steel Workers Alliance called the ruling a “worrying development” and urged clarification on job security.
The collapse of SSUK marks another blow from Gupta, once known as the “Savior of Steel”. His global free steel empire expanded rapidly after 2010 through acquisitions and was heavily funded by Greenstone Capital. Greensill’s 2021 outage exposed Gupta’s company, sparking a serious fraud office investigation. He denied any misconduct.
SSUK owes creditors such as UBS and Greenland administrators more than £200 million. In court, Gupta asked for another month to finalize his rescue plan, but was denied. His lieutenant Jeffrey Kabel branded the judge’s ruling “irrationality”, saying: “Taxpayers will now run a business that could have been privately funded.”
SSUK produces expert steel for aerospace and defense, but the operations have been sealed for several months due to lack of funds. The High Court heard that the company didn’t even have enough funds to meet this week’s payroll.
Losses in output have forced supply chain gaps to be filled by imports. Gareth Stace, Director General of the British Industrial Institution Steel Corporation, said: “The government needs to protect the industry from unfair trade and high energy costs to make the specialist steel business and the rest of the UK steel ecosystem sustainable.”
The intervention highlights Prime Minister Rachel Reeves’ ropes as she picks on her assurances, demands the reconstruction of the UK’s manufacturing base and bears financial pressure to support unprofitable industries. Steel has approximately 37,000 employees in the UK, accounting for 0.8% of manufacturing output.
For the minister, Rotherham is a gamble: stabilize the plants, find buyers and protect skilled jobs, or risk accusing the state of throwing good money in a bad industry that is already in a structural decline.
