A BITTER struggle for the future of steelmaking on Teesside is taking place after rescue attempts in the UK were thrown off course by SSI’s banks.

The troubled firm’s Thai lenders refused to put off loan payments of more than £400m and have drawn up a six-year plan to keep the steel company solvent.

SSI had been expected to enter administration on Friday, risking more than 2,000 jobs, but enabling a rescue plan to take place, saving parts of the plant and about 400 jobs.

But the latest revelation from Bangkok suggested the Thai owners and their backers are unwilling to let go of the plant they brought back into production in April 2012.

Following a day of crunch talks in Redcar, MPs called on SSI to step aside so the plant can be mothballed and the site secured so there is a fighting chance for steelmaking to return in the future.

Steel minister Anna Soubry said she was “astonished” by the scale of debts run up by the Thai company with UK suppliers – thought to be about £120m – as she called on the owners to “bite the bullet”.

Asked if that meant they should consider administration, Ms Soubry replied: “Yes.” 

The minister will continue talks in Redcar today with a task force set up to support suppliers, workers and contractors who face the prospect of not being paid

SSI had hoped to delay loan repayments of more than £400m to its lenders until the end of the year.

But with the firm’s liabilities now exceeding its total assets Siam Commercial, Krung Thai and TISCO banks have exercised their right to implement a financial plan which will see the firm enter into business rehabilitation with SSI’s Teesside operations acting as guarantor.

A financial advisor will be appointed and the banks will continue to provide cash to keep SSI from becoming insolvent.

SSI will need to repay debts over a six year period.

The move is part of plans by the lenders to protect their investments and prop up SSI in Thailand where its assets include a port and steel mill.

How this will impact on SSI’s UK is unclear at this stage but MPs fear it is a tactic to prevent the Redcar business from being put into administration.

Steel Minister Anna Soubry said that officials are investigating what this means and consequences for SSI UK.

The Northern Echo: Redcar blast furnace, part of the Teesside Cast Products on the day it was annouced the plant is to be sold to SSI (Sahaviriya Steel Industries).

Ms Soubry, who is staying on Teesside tonight following a fish and chip tea at the coast, fears that SSI’s board in Thailand have given up on the Redcar plant they bought from Tata Steel in 2011.

SSI president Win Viriyaprapaikit – hailed as a hero when he brought the plant back to life three and a half years ago – has refused all requests to come clean with his workforce, unions or Tees MPs following his decision two weeks ago to suspend production. Even a phone call to the Bangkok-based steel man from Prime Minister David Cameron would not break the silence, said Ms Soubry.

“I get the feeling the tap has been turned off,” said the minister. “SSI has to be honest and bite the bullet.”

Asked if that meant they should consider administration, Ms Soubry replied: “Yes.”

On Monday, SSI started the process of mothballing the site that will result in 1,700 workers losing their jobs. Administration would threaten the site’s remaining 500 staff, but a rescue plan to run coke ovens and the bulk and protect the blast furnace could kick into action quickly, with a North-East firm poised to step in.

Ms Soubry said she was “very impressed by the plan” that would support her desire to keep the plant alive in the hope new owners can be found and steelmaking return when slab prices pick up. She added: “I get steel. It is a vital industry and this is a fantastic site with a brilliant workforce and a management who clearly know their jobs.

“The goodwill from local companies toward SSI has been astonishing. Local firms have put so much of themselves into making this a success and they have not been paid. I would very much like the (Viriyaprapaikit ) family to see if they can help the subcontractors and pay them what they are owed.

“It is time to appeal to the honour of the Thais to fulfil their obligation here on Teesside,” said the minister.

SSI UK’s debt to UK suppliers, the local authority is understood to be about $180m (£120m) but today's talks suggested that figure could rise.

Redcar MP Anna Turley said: “New revelations about SSI are emerging every day and we do not have confidence in their ability to save the plant.”