UKs steelworks falls under government control

A major UK steel plant is placed in liquidation and government hands as creditors move to shield workers while a buyer is sought.

UK's third largest steelworks falls under government control

In Rotherham and Sheffield, Speciality Steels UK, part of Liberty Steel, was ordered into compulsory winding up after creditors sought relief. The plant employs nearly 1,500 workers. The Official Receiver and managers from the consultancy firm Teneo will operate the business during the liquidation while a buyer is sought. The government has agreed to cover ongoing wages and costs during the search for a purchaser.

The move follows court delays to allow time for a potential pre-pack administration, which would auction the business to a bidder. Liberty Steel described the decision to liquidate as irrational. The case highlights the financial strain on the Liberty Steel group, described by the judge as hopelessly insolvent with only £600,000 in the bank and a monthly wage bill of about £3.7 million, amid insolvencies across nine jurisdictions and 15 entities. Lawyers had argued that a forced liquidation could push the business into free fall and badly disrupt a nationally important steel operation and its workforce.

This case tests how Britain balances industrial strategy with private sector risk. A government rescue could protect jobs and national interest, but it also raises questions about how much public money should back private bets in a strategic industry. The collapse underscores the fragility of cross-border corporate groups and the limits of relying on private owners to fund long-term capital in sectors like steel.

If a buyer emerges, the shape of UK steel’s future will hinge on whether the state intervention is temporary or gains lasting meaning for workers and suppliers. Communities in Rotherham and Sheffield will watch closely to see whether this is a one-off lifeline or a sign of a new normal for manufacturing amid global pressures and private equity dynamics.

Highlights

The coming weeks will reveal how ready Britain is to protect its essential industries without normalizing bailouts.