Britain’s tax authority is contemplating voting against a court-led restructuring of the steel operations owned by Sanjeev Gupta.
Sky News understands that HM Revenue & Customs (HMRC) is understood to be in ongoing talks with Mr Gupta’s Liberty Steel about proposals that would see it forfeit the majority of the tax it is owned by the tycoon.
A convening hearing for a restructuring plan for Mr Gupta’s Speciality Steel division in the UK had been due to take place this week, but has been rescheduled for later this month.
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People close to the company said that this was to allow more time for negotiations with creditors, including HMRC.
A creditor vote would not take place until next year.
Last month, Sky News revealed Mr Gupta’s intention to seek court approval for the compromise deal with creditors, with the Financial Times subsequently reporting that the tax authority would stand to lose up to 80% of what it is owed if it is approved.
It was unclear on Thursday what impact a vote against the restructuring plan by HMRC would have on Mr Gupta’s ability to push the deal through.
A spokesperson for HMRC would not comment on the specific details of the SSUK deal, but said: “We take a supportive approach to dealing with customers who have tax debts, working with them to find the best possible solution based on their financial circumstances.”
Liberty Steel declined to comment.
Begbies Traynor, the insolvency practitioner, has been appointed to oversee the restructuring plan, which would not have an impact on the 1,500 employees of SSUK.
In 2021, Mr Gupta sought £170m from the government in emergency assistance, but the request was rejected.
The SSUK division operates across sites including at Rotherham in South Yorkshire and Bolton in Lancashire.
It makes highly engineered steel products for use in sectors such as aerospace, automotive and oil and gas.
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Mr Gupta’s efforts to turn around the business are said by allies to have been hampered by its deep relationship with Greensill Capital, the controversial financial group which collapsed in 2021.
The restructuring of SSUK comes as Chinese-owned British Steel continues to discuss a potential aid package with the government.
Tata Steel, the industry’s biggest player, has agreed a deal to receive £500m from the taxpayer in order to electrify steel production at its Port Talbot plant.
As part of that deal, though, thousands of steelworkers are being made redundant.