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The metals tycoon Sanjeev Gupta is plotting to hand control of his remaining UK steel operations to his family in a bid to stave off their collapse into compulsory liquidation and a government-orchestrated fire-sale.
Sky News has learnt that Mr Gupta is proposing to refinance the business through a pre-pack administration that would result in Liberty Steel’s Speciality Steels UK (SSUK) being owned by a trust-like structure set up for the benefit of his family.
The disclosure comes amid deepening uncertainty about the fate of SSUK, which 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.
At a hearing at the High Court in London on Wednesday, it was confirmed that the government was preparing to step in and oversee an insolvency of Mr Gupta’s remaining UK steel business, as Sky News reported last weekend.
The connected pre-pack administration of SSUK planned by Mr Gupta would result in it ridding itself of hundreds of millions of pounds of tax and other liabilities.
Begbies Traynor, the accountancy firm, is working on efforts to progress the pre-pack deal.
If the petition to have SSUK placed into compulsory liquidation is made, a special manager would be appointed by the Official Receiver to run the operations.
A letter from the Department for Business and Trade, which was referred to in court on Wednesday, stated that “the Official Receiver is prepared, should SSUK enter into compulsory liquidation, to take control of SSUK’s affairs”.
“[His Majesty’s Government] has been approached by independent third parties who have expressed an interest in returning some or all of the sites to steelmaking,” the letter said.
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