Published: 6th October 2015
It has been revealed that huge demands of more than £430m by a consortium of Thai banks were behind the collapse of Teeside steelmakers SSI UK which has now entered liquidation with thousands of jobs lost.
The parent company of SSI UK, Sahaviriya Steel Industries, filed a document which stated that their major creditors Krungthai Bank Public Company, TISCO Bank Public Company and The Siam Commercial Bank Public Company had demanded a combined repayment worth 23.9 billion Baht, equivalent to £430m, and the document also stated that this debt was guaranteed against SSI UK.
The document went onto explain that all debts of SSI UK had to be recognised and in doing so they had to accept the company could not meet its liabilities which exceeded its total assets, leading to the beginning of the liquidation process.
Sahaviriya Steel Industries took out the original loan to buy Tata Steel’s Teeside Cast Products in 2011 but on 28th September 2015 everything halted with the iron and steelmaking factory in Redcar bearing the brunt with 1,700 redundancies.
In response to the losses the government announced that it would offer up to £80m to support the workers who had been made redundant but they refused to go as far as to offer an open funding commitment to keep the coke ovens in Redcar going based on taxpayer money.
There are 2,000 staff working at the Redcar facility and it is expected that all of them will lose their jobs. The request to keep the facility open on some basis, in a form of nationalisation, was rejected by the government in a statement where they asserted they had ‘no confidence that this is a realistic proposal for taxpayers to support'.
Business Minister Anna Soubry shared her understanding of the need to keep coking ovens going and the need to work quickly in this situation but she also further asserted that the government support was limited to the £80m aid package and that the focus now should be on what happens with it. Soubry added it was time to discount Sahaviriya Steel Industries, the parent company, altogether as the people in charge now are the creditors at the Thai bank consortium.
The effect of the company’s liquidation on Redcar and the surrounding area in the North East has yet to be realised but those who are made redundant may well need more than what is being offered in the government support package.
Real Business Rescue is currently advising individuals affected by the SSI liquidation. If you know of any people or businesses affected by the recent news, please feel free to put them in touch with our Teesside / Tyneside offices, who will offer a free advice clinic. With 78 offices stretching from Inverness down to Exeter, Real Business Rescue can offer unparalleled director advice across the UK.