Thailand's largest metallurgical company SSI agreed to defer debts

Sahaviriya Steel Industries and three of its major lenders said they had reached an agreement on a $ 1.4 billion debt restructuring agreement.

Thailand's largest steel company Sahaviriya Steel Industries (SSI) and its three major creditors have said they have agreed to consider options for restructuring a $ 1.4 billion debt. The announcement came after SSI announced Saturday that it would suspend steel production at its largest steel plant in the UK due to financial problems and high energy costs.

Possible restructuring options include the sale of UK assets. Vin Viriyaprapaykit, chief executive officer of the company, said that the company is already looking for potential buyers. Negotiations with all interested parties will be completed by the end of September, he said.

As a reminder, the Redcar plant was acquired by SSI from Tata Steel in 2011. Since then, the mill has been in an endless train of debt, and SSI has been forced to borrow more and more in order to continue producing steel at Teesside.

Siam Commercial Bank's three lenders, Krung and Tisco Bank, have issued a US $ 790 million syndicated loan to SSI for the purchase of a British steel mill.

A smelter in the UK provided half of SSI's steel production, but never became profitable.

Vin said he expects further losses this year due to his UK venture, while Thai operations remain profitable. The company also expects some operating profit in 2016 after the shutdown of the loss-making plant in Redcar.

According to the head of SSI, steel prices in Thailand will recover next year, amid rising domestic demand following government investment in infrastructure.