UK's third-largest steel producer pushed into compulsory liquidation

One of the UK's last remaining steel companies has been pushed into compulsory liquidation - and will fall into government control.

Speciality Steels UK (SSUK), part of the Liberty Steel empire owned by metals tycoon Sanjeev Gupta, employs nearly 1,500 people at sites in Rotherham and several other locations across South Yorkshire. Behind Tata Steel and British Steel, it is the third-largest steel producer in the country.

Politics live: New migrant stats released Sky News reported that negotiations had been underway for a deal to rescue the firm, however, they seem to have been rendered unsuccessful. The government-run Insolvency Service confirmed it will be acting as the liquidator.

It added that Teneo Financial Advisory Limited would be assisting in running the company from now on. While the GFG Alliance, the holding company, says it is disappointed by the decision, local politicians and unions are highly critical of the group.

The government says wages will continue to be paid by the liquidator. A spokesperson adds that the government is still "committed to a bright and sustainable future for steelmaking and steel-making jobs in the UK".

Financial assistance was not able to be given to SSUK by the government due to its existing financial and corporate challenges, including ownership and management. Read moreWhitehall on alert for collapse of steel empireBlackRock backs Gupta's bid to keep controlWhy did British Steel need saving In a statement today, GFG's chief transformational officer, Jeffrey Kabel said: "The decision to push Speciality Steel UK into compulsory liquidation, especially when we have support from the world's largest asset manager to resume operations and facilitate creditor recovery, is irrational.

"The plan that GFG presented to the court would have secured new investment in the UK steel industry, protecting jobs and establishing a sustainable operational platform under a new governance structure with independent oversight. "Instead, liquidation will now impose prolonged uncertainty and significant costs on UK taxpayers for settlements and related expenses, despite the availability of a commercial solution.

"Liberty has pursued all options to make its SSUK viable, including efficiency improvements, reorganisations, customer support, several attempts to find a buyer for the business and intensive negotiations with creditors to restructure debt liabilities. Liberty's shareholder has invested nearly £200m, recognising the vital role steel plays in supplying the UK's strategic defence, aerospace and energy industries.

"GFG will now continue to advance its bid for the business in collaboration with prospective debt and equity partners and will present its plan to the official receiver. GFG continues to believe it has the ideas, management expertise and commitment to lead SSUK into the future and attract major investment.

GFG's other significant business interests in the UK remain unaffected. "Despite many challenges facing the group and the difficult market conditions, GFG has invested over £2bn into the UK economy since 2013, ensuring the survival of many GFG businesses despite operating losses and safeguarding thousands of jobs that would otherwise have been lost." Sarah Champion, the Labour MP for Rotherham, said GFG's statement was "full of hollow promises".

She added: "We know Liberty is a golden goose, but one they have starved for years. "The speciality steel we make is unique and in high demand, it makes no financial sense that GFG furloughed the plant for nearly two years.

"Strategically, the government cannot allow Liberty Steel to fail. I am confident they will do all in their power to let it flourish." ????Listen to Politics at Sam and Anne's on your podcast app????  Charlotte Brumpton-Childs, the national officer for the GMB union, also attacked GFG.

She said: "This is another tragedy for UK steel - and the people of South Yorkshire - this time brought on by years of chronic mismanagement by the owners. "But this represents an opportunity for the UK government to take decisive action - as it did with British Steel - to protect this vital UK industry." A government spokesperson said: "We know this will be a deeply worrying time for staff and their families, but we remain committed to a bright and sustainable future for steelmaking and steel-making jobs in the UK.

"It is now for the independent Official Receiver to carry out their duties as liquidator, including ensuring employees are paid, while we also make sure staff and local communities are supported.".