BlackRock Backs Gupta in High-Stakes Bid to Save Liberty Steel UK

Global asset manager supports controversial rescue plan as UK steel future hangs in the balance

BlackRock Offers Lifeline to Gupta’s Steel Operations

The world’s largest asset manager, BlackRock, has issued a financing support letter for Sanjeev Gupta, providing critical backing as the embattled steel tycoon fights to retain control of his troubled UK steel empire.

BlackRock’s private capital funds are understood to be ready to inject as much as £75 million into Liberty Steel’s Speciality Steels UK (SSUK), which employs nearly 1,500 workers across sites in Sheffield, Rotherham, and Bolton.

This financial backing could allow Gupta to proceed with a connected pre-pack administration—a strategic move to rescue the business while shedding hundreds of millions in liabilities.

What’s at Stake for the UK Steel Industry

SSUK is a key player in Britain’s industrial ecosystem, producing highly engineered steel for sectors including:

• Aerospace
• Automotive
• Oil and gas

The company claims to have invested £200 million in the past five years, but has been hit hard by:

• Soaring energy prices
• Ongoing reliance on cheap steel imports
• Post-pandemic financial turbulence

If Gupta fails to secure a rescue deal, SSUK could enter compulsory liquidation within days following an upcoming winding-up petition hearing.

Government and Creditors Watch Closely

Although BlackRock’s involvement strengthens Gupta’s hand, there is growing resistance from creditors and government bodies. These include:

• HM Revenue and Customs, owed substantial tax liabilities
• UBS, a major creditor following its rescue of Credit Suisse, which had ties to the collapsed Greensill Capital
• Grant Thornton, administrators of Greensill, closely monitoring legal proceedings

Meanwhile, the government has stepped up preparations for the potential collapse of SSUK, with the Department for Business and Trade confirming it is “closely monitoring developments.”

Though Business Secretary Jonathan Reynolds has not ruled out support, no official assistance is currently expected.

Why BlackRock’s Support Matters

BlackRock’s financial backing not only gives Gupta time to restructure but also signals confidence in the long-term viability of the UK steel sector.

Notably:

• BlackRock has already supported Liberty Steel’s operations in Australia and the US
• This move reaffirms its commitment to strategic, heavy industry investments

Yet critics argue that a connected pre-pack sale—where Gupta would reacquire the company minus its liabilities—could undermine creditor rights and fuel further scrutiny.

The Bigger Picture: A Fragile Steel Sector

Gupta’s UK business has long been under pressure, and the current crisis reflects wider challenges in the British steel industry, including:

• Dependence on volatile energy markets
• Lack of protection against low-cost imports
• A limited pipeline of long-term government support

The government has previously refused Gupta’s appeals for help, including during the pandemic and earlier this year, when officials rejected attempts to apply emergency legislation used to rescue British Steel.

Conclusion: Make-or-Break Moment for Liberty Steel

As the UK steel industry teeters on the edge, BlackRock’s intervention may be the last chance to save SSUK from collapse. But this lifeline comes with complications—stakeholder resistance, government hesitation, and legal risk.

If Gupta pulls off the deal, he not only saves nearly 1,500 jobs but also preserves a vital manufacturing capability in the UK. If the bid fails, Britain risks losing a cornerstone of its strategic industrial base.

The next few days will be decisive—not just for Liberty Steel, but for the future of UK steelmaking in a fiercely competitive global market.

Source: (Skymoney.com)