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New deals secure vital cash for long-term future
STEELMAKER SSI has deals for two vital cash injections as part of a bid to secure its longterm financial stability.
The Thailand-based company, which re-opened the former Teesside Cast Products plant in April, has agreed a deal that will see two Japanese investors buy a combined £30m of SSI shares. The move follows the launch last month of a drive to raise about £265m of investment.
Yesterday’s announcement was the latest step in a process aimed at balancing the books at SSI which has endured a torrid period amid falling steel prices and rising of raw materials costs.
Despite this, it recently reached a landmark, exporting its one millionth tonne of steel slab since operations restarted at the previouslymothballed blast furnace in Redcar.
The deal will see Japanbased JFE Steel Corporation and Marubeni-Itochu Steel Inc (MISI) each invest about £15m to increase their stake in the Thai Cold Rolled Steel Sheet company which is jointly owned by the three firms.
The deal will see the trio work in partnership to grow their share in the South East Asian steel market.
Furthermore, JFE will supply SSI with steel to ensure the company’s mills in Thailand have a steady supply.
This is in addition to the weekly shipments of steel sent from Teesport.
Phil Dryden, the chief executive for SSI UK welcomed the agreement. He said: “This follows on from last month’s announcement regarding a comprehensive financial plan and is further evidence of the steps being taken to give short and long-term financial stability to SSI and its subsidiaries, including SSI UK.”
“In addition, it also represents the strengthening of the partnership of SSI, JFE and MISI with this strategic investment aimed at taking advantage of the long-term opportunities of a growing automotive market in Thailand.
Win Viriyaprapaikit, group chief executive and president of SSI, said: “The first pillar of our growth is upstream integration, which started with the successful restart of SSI Teesside plant in the UK and is providing the raw material security to our business.
“The second pillar of growth is downstream integration.
“This business partnership provides us with the technology and access to the growing high-end market.
“We are fundamentally transforming our business to be able to better serve our customers and capture the opportunities in this growing Asean (South-East Asian) market.”