The government is poised to take the UK’s third-largest steelworks into public ownership, after months of talks to find a buyer broke down.
Business secretary Jonathan Reynolds said on Monday that ministers would seek to use recently ratified legislation to nationalise Speciality Steel UK (SSUK) from failure, a matter of weeks on from a similar move to take ownership of Scunthorpe’s British Steel.
The future of the South Yorkshire steelmaker – which employs nearly 1,500 people and used to be owned by metal magnate Sanjeev Gupta – had for months been the subject of fraught negotiations, with ministers battling to find a private sector buyer.
Ministers took control of SSUK a year ago, after creditors issued Gupta a winding up order bid to recoup for hundreds of millions of pounds they were owed by the controversial tycoon. The government initially tried to sound out corporate interest in the steelmaker, which boasts four sites across the northern county including in Rotherham and Stocksbridge. Talks were most advanced with Blastr, a small Norwegian firm that at one stage entered exclusive negotiations with Whitehall officials over taking on ownership of SSUK.
But talks ground to a halt in June, after the two parties failed to reach an agreement having extended the exclusivity period. Officials judged the proposal would not be able to “provide the long-term stability, certainty and value for money”, the government said.
Reynolds trumpeted the deal as saving over 1,300 jobs and protecting a vital piece of national infrastructure. “We do not intervene in private companies lightly,” he said. “But nor can we simply stand aside and allow the future of this company and over 1,300 jobs to be decided by default.”
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