Steel tycoon Sanjeev Gupta lines up BlackRock to finance rescue of UK factories
The US firm is in advanced talks to provide financial backing for a deal that would allow Mr Gupta to retain control of the British arm of Liberty Steel, The Telegraph understands.
A deal would potentially safeguard up to 1,500 jobs at Liberty's Speciality Steels UK (SSUK) business in South Yorkshire, which operates Britain's only electric-arc furnace.
Funds managed by BlackRock could provide up to £75m of support to Mr Gupta, sources indicated, allowing him to proceed with a so-called pre-pack administration of SSUK that would rid the business of hundreds of millions of pounds of debt and tax liabilities.
The troubled tycoon is scrambling to get the deal over the line in advance of a hearing on a winding-up petition scheduled for Wednesday.
The hearing could result in the compulsory liquidation of SSUK, though it is understood that Mr Gupta will seek to delay a decision, having already been granted adjournments in May and July after he said that 'urgent' talks were underway to rescue the business.
Mr Gupta's empire has been pushed to the brink after the collapse of its main lender, Greensill Capital, in 2021. The Serious Fraud Office (SFO) opened an investigation into Mr Gupta's GFG Alliance in 2024, including examining its relationship with Greensill. GFG has consistently denied any wrongdoing. The investigation is ongoing.
An intervention from BlackRock, the world's biggest asset management firm, would be welcomed by Labour, which has been under pressure to step in and nationalise Liberty in a move that would make it even tougher for Rachel Reeves, the Chancellor, to balance the books.
Jonathan Reynolds, the Business Secretary, in April authorised a taxpayer-funded takeover of British Steel, which was losing £250m a year, to stop Chinese owner Jingye shutting down its Scunthorpe blast furnaces and ending UK production of virgin steel.
While Liberty operates on a smaller scale, saving its electric-arc furnace in Rotherham would chime with Labour's commitment to slashing carbon emissions and cleaning up industrial processes. The factory uses recycled scrap steel and could be powered by renewables.
Tata Steel has committed to installing an electric-arc furnace in Port Talbot, aided by £500m in government funds, though the plant is not expected to come back on line until late 2027.
BlackRock, which declined to comment, has already provided a boost for Sir Keir Starmer. Larry Fink, its co-founder and chief executive, said in April that UK assets were 'undervalued' and his firm was investing in Britain 'across the board.'
A spokesman for Liberty said that discussions were ongoing to finalise options for SSUK.
They said: 'We remain committed to identifying a solution that preserves electric-arc furnace steelmaking in the UK, a critical national capability supporting strategic supply chains.
'We continue to work towards an outcome that best serves the interests of creditors, employees, and the broader community.'
A Government spokesman said: 'We continue to closely monitor developments around Liberty Steel, including any public hearings, which are a matter for the company.'
Raw steel imports
Mr Gupta's plans are likely to face opposition from Liberty Steel's creditors, which include HM Revenue and Customs and UBS, whose exposure was partly inherited from insolvent Greensill Capital, which had backed the troubled tycoon.
Separately, British steelmakers are said to be considering legal action against the Government over new tariffs on raw materials imported into the UK.
The industry has been left reeling from a government decision to ram through tariffs on raw steel imports, saying the move has caused port bottlenecks, shipment delays and higher costs, which could lead to 'significant job losses'.
In July, Mr Reynolds dramatically reduced the amount of some forms of raw steel that can be imported before the UK's 25pc tariff kicks in. Only 15pc or 20pc of imports now come in tariff-free, rather than the previous 70pc.
The Trade Remedies Authority (TRA) had recommended that the Government make the change in October, giving the industry more time to find alternative supplies.
The Confederation of British Metalforming, which represents more than 200 businesses, said the Government's failure to follow the TRA's advice on timing had 'created a tsunami of issues for the downward supply chain'.
The industry group has written to Mr Reynolds protesting the measures and is said to be considering a judicial review if necessary, the Guardian reported.
The so-called 'safeguarding measures' introduced by Mr Reynolds are meant to allow some tax-free imports before using tariffs to shield domestic producers.
But the Government's rapid change to the safeguarding quotas has caused disarray, with a 25pc tariff suddenly hitting shipments that had already paid for and were in transit.
A Department for Business and Trade spokesman said: 'We do not comment on potential or ongoing legal proceedings.'
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