LONDON — Britain’s third largest steel works has collapsed and been placed under government control, putting 1,500 jobs at risk in a major blow to the country’s industrial sector.

Insolvency courts have ordered the compulsory liquidation of Speciality Steels UK (SSUK), part of Sanjeev Gupta’s GFG Alliance metals empire, over debts amounting to hundreds of millions of pounds.

The Official Receiver and corporate advisory firm Teneo will now take charge of the company’s operations while efforts are made to secure a buyer. During this period, the UK Government has pledged to cover wages and operational costs to keep the plant running.

The collapse comes amid mounting financial strain within Gupta’s metals group, which has faced intense scrutiny and difficulties in refinancing its operations since the fallout of its main financier, Greensill Capital, in 2021.

Responding to the court’s decision, Liberty Steel — also part of Gupta’s steel operations — condemned the move as “irrational”, warning it could jeopardise the future of UK steelmaking.

The government has not yet confirmed whether potential buyers have come forward but stressed that safeguarding jobs and maintaining the UK’s industrial capacity remain priorities.