The metals tycoon Sanjeev Gupta is this weekend plotting a controversial deal to salvage his remaining UK steel operations and avert their collapse into compulsory liquidation – a move that would put close to 1,500 jobs at risk.
Sky News has learnt that Mr Gupta is in talks about a so-called connected pre-pack administration of Liberty Steel’s Speciality Steel UK (SSUK) arm, which would involve the assets being sold – potentially to parties linked to him – after shedding hundreds of millions of pounds of tax and other liabilities to creditors.
Begbies Traynor, the accountancy firm, is understood to be working on efforts to progress the pre-pack deal.
This weekend, Whitehall sources said that government officials had stepped up planning for the collapse of SSUK if an already-deferred winding-up petition scheduled to be heard next Wednesday is approved.
If that were to happen, SSUK would be likely to enter compulsory liquidation within days, with a special manager appointed by the Official Receiver to run the operations.
Mr Gupta’s UK business operates steel plants at Sheffield and Rotherham in South Yorkshire, with a combined workforce of more than 1,400 people.
SSUK is Britain’s third-largest steel producer.
Sources close to Mr Gupta could yet secure a further adjournment of the winding-up petition to buy him additional breathing space from creditors.
In May, a hearing was adjourned after lawyers acting for SSUK said talks had been taking place with “a third-party purchaser”.
Their identity has not been publicly disclosed, and it has been unclear in recent weeks if any such discussions were continuing.
A connected pre-pack risks stiff opposition from Liberty Steel’s creditors, which include HM Revenue and Customs.
UBS, the investment bank which rescued Credit Suisse, a major backer of the collapsed finance firm Greensill Capital – which itself had a multibillion dollar exposure to Liberty Steel’s parent, GFG Alliance – is also a creditor of…
