REPORTS in the Far East that a deal for Corus Teesside Cast Products (TCP) was imminent were treated with caution last night.

Sahaviriya Steel Industries (SSI) is expecting to sign a memorandum of understanding “soon” to buy a stake in the Redcar facility, according to The Nation, a respected Thai newspaper.

The newspaper quotes an SSI source who said the Thai steel company wants to buy TCP to give it a manufacturing base through which to enter European markets.

It goes on the claim that the company believes the time is right to strike a deal because of the weak euro.

The source said: “SSI’s management team believes that this is the appropriate time to acquire TCP as the depreciation of the euro and the public debt crisis in Europe have lowered TCP’s asset value.

“Besides, SSI’s upstream steel blast furnace plan in Thailand has been postponed due to lack of clarity in the regulation of Article 67 (2) of the Constitution.”

Corus last night declined to comment on the speculation.

But steel industry insiders said the reports were likely to be treated with caution by Corus.

February’s mothballing of TCP cost 1,600 jobs, although a number of factors have reduced the number of compulsory redundancies.

SSI has been seen as the most likely buyer for the plant since reports that representatives of the company visited TCP in April, as part of a “due diligence” process of checking the business’ assets.

In May SSI President Win Viriyaprapaikit agreed to meet a North-East delegation of union leaders and MPs in Bangkok, even though neither it, nor Tata Steel-owned Corus, have officially revealed they are in negotiations.

Corus yesterday defended the record of Kirby Adams, chief executive of its parent company Tata Steel Europe, after he came under fire following reports on Sunday that he was paid more than £2m in the last financial year.

Mr Adams, who is to step down in October to return to his native Australia after 18 months in the position, has been widely criticised over his handling of the mothballing of TCP. Tata Steel Europe’s annual report states its highest paid director received £2,039,140.

As the company is no longer publicly listed, it does not have to reveal the identity of the director in question but it is thought to be Mr Adams.

Last night a Corus spokesman said: “There was a pay freeze put in place last year which was imposed uniformity throughout the group on employees and directors.

“When Kirby joined the company it was losing more than £100m a month and it is now in profit.”

Tata Steel Europe reported a £328m profit in May, compared to a £521m loss the previous year. It is understood that Mr Adams pay package could have included incentives to attract him to Corus in the first place.

Earlier this year Mr Adams was criticised by MPs for not appearing before a select committee inquiry into the TCP mothballing and unions said he was in danger of damaging Tata and Corus’ good reputation.