THE woes of steelmaker SSI are mounting as reports in Thailand say the firm’s plea to postpone debt repayments will fall on deaf ears.

PHOTOS: The highs and lows of steelmaking on Teesside

Three major financial backers behind Redcar steel works are likely to reject a request to reschedule payments of about £510m which are due next Wednesday, September 30, The Bangkok Post said this morning.

Troubled SSI, which last week stopped production at its Teesside plant to stem mounting losses, has asked its Thai bankers - Krungthai Bank (KTB), Siam Commercial Bank (SCB) and Tisco Bank - to push back the outstanding debt payments until December 30.

Tisco Financial Group, the holding company of Tisco Bank, said the bank would not reschedule the company's debt payment from the end of this month to December. Instead, if SSI fails to repay as scheduled, the bank will ask for a debt default, write it off and classify the company as a non-performing loan (NPL) – where payments of interest and principal are past due by 90 days or more - eligible for the restructuring process.

However, the banks’ preferred plan could boost the long-term prospects of SSI’s Redcar operations as the banks want SSI’s Thai division to continue supporting the loss-making Teesside business.

"We should split SSI's business between Thai operations and Britain and transfer the British debt to the parent company," said Oranuch Apisaksirikul, Tisco Financial Group's president. "The positive performance and cash flow of the parent would help to support the capability of the company to succeed in its new debt-restructuring plan," he added.

Mr Viriyaprapaikit, SSI president, yesterday told a press conference in Thailand SSI has paused iron and steel making last Friday to negotiate with the government, trade partners and unions in the hope of resuming work. He has also been in talks with investors over selling them SSI UK, or a stake in the business, but nothing has been finalised.

The update from Thailand came as unions warned British taxpayers will have to foot a huge bill if David Cameron's government fails to bail-out SSI Redcar.  

The Community trade union, which represents the majority of employees and contractors at SSI on Teesside, says that if the government doesn't step in to support the company, it could cost the taxpayer 'hundreds of millions'.

Roy Rickhuss, Community's General Secretary, said: "What SSI needs is some short-term and immediate assistance from government. The most important thing to do is to ensure that these industrial assets are protected and preserved until steel making can resume. If that means the government has to step in and assist then so be it.

"Last week the Prime Minister said his government would do 'all we can' to help the UK steel industry. Now is the time to demonstrate the political will behind those words. Ministers should be bold in the interests of the steel industry, the SSI workers and the whole Teesside community."

"The government has argued that EU state aid rules are preventing it from intervening. I wiil be writing to the European Commission today to seek clarification about the UK's application of state aid rules. 

"The costs of inaction could be far greater for the government. Should SSI fail then it's taxpayers who could pick up the costs of redundancies and cleaning up the site. Clean up costs could run to hundreds of millions of pounds. It's in the interests of all parties to find a solution to the current difficulties."