UK govt to pick up wages, pensions at collapsed Liberty Steel plant

(Sharecast News) - The UK government said it would pay August wages and pension contributions for workers at Liberty Steel's plant in South Yorkshire after a government-appointed special manager took over the collapsed company. A judge at London's High Court approved the petition for Yorkshire-based Speciality Steel UK (SSUK), Britain's third-largest steelworks, to be placed into compulsory liquidation, saying its owner, metals tycoon Sanjeev Gupta, had no prospects of several hundred million pounds of debt.

Union leaders representing SSUK's 1,450 workers met administrators seeking guarantees on pay and pensions, as well as on when operations could restart at sites including Rotherham and Stocksbridge in South Yorkshire, after a year without work.

Roy Rickhuss, general secretary of the Community union, which represents the industry, said he had "received firm assurances" on pay and pensions, the BBC and Guardian reported.

The court heard on Thursday that SSUK had only £650,000 left in its bank account, with the August payroll of £3.6m due on Friday. Gupta's counsel had argued that he was ready to cover the payments via another company, Liberty Capital UK, although the judge, Justice Mellor, said Gupta's assurances that he could pay "are at best questionable".

Special managers appointed to run the business committed that workers would receive their August pay packets before the bank holiday weekend and would make up unpaid employer pension contributions for the past year.

It remains unclear when the plants will restart production, although a person briefed on the talks said the special managers had given positive signals that it could happen soon. Restarting production and trying to generate cash after four years in which it lost £340m will be crucial to limiting the costs of the administration, which will be borne temporarily by the government.

Sharon Graham, the general secretary of the Unite union, said the government "must provide long-term guarantees that it will protect jobs" and be ready to run the business itself if no buyer can be found.

The government this week told the court via a letter that several potential buyers had already made contact to express interest in buying SSUK from administration.

Reporting by Frank Prenesti for Sharecast.com