The business rehabilitation plan for Sahaviriya Steel Industries Plc (SSI) is expected to be completed by August, one of its bank creditors has said. Among the crucial elements of the programme are a debt-to-equity swap and a new strategic partner.
The new deadline was pushed back from March as the plan had proved more complicated than initially expected, Arthid Nanthawithaya, chief executive and deputy executive chairman of Siam Commercial Bank (SCB), told the Bangkok Post.
The completed rehabilitation plan is scheduled to be submitted to the Court in November, he said.
SCB, Krungthai Bank (KTB) and Tisco Bank are the major creditors for debt-laden SSI. The country's largest hot-rolled steel sheet maker and its loss-making subsidiary, SSI UK, which operated a steel plant in Teesside, England, borrowed a combined 48.4 billion baht from three lenders -- 22 billion each from KTB and SCB and 4.4 billion from Tisco. They subsequently defaulted last September.
SSI reported that its consolidated net loss widened substantially to 40.8 billion baht last year from 4.9 billion in the previous year, which caused shareholders' equity to plummet.
The Stock Exchange of Thailand suspended SSI's stock trading for 30 days from Feb 25 to allow SSI's executives to decide whether the company would proceed with a business rehabilitation plan or delist its stocks.
The steel maker recently said the Central Bankruptcy Court had approved its business rehabilitation plan.
Mr Arthid said that a debt-to-equity conversion was one way to help SSI shareholders' equity swing back into positive territory.
"The plan would cover both capital and debt restructuring, and the search for a potential strategic partner," he said.
Even though the three creditors have not thrown a new lifeline to SSI because the business rehabilitation plan has not been completed, the company has managed to conduct operations on its own revenue stream, Mr Arthid said.