SSI bought a UK steelworks for $469M — the debt and the steel price crash killed it

Sahaviriya Steel Industries (SSI), Thailand's largest hot-rolled coil steel maker, collapsed after a debt-financed overseas acquisition went wrong. In February 2011, SSI bought the Redcar steelworks in Teesside, England from Tata Steel for $469 million. The plan was to process slabs from Thailand at the UK plant and sell into the European market. The acquisition was financed almost entirely through debt from Thai banks.

The global steel price crash of 2014–2015 destroyed the business case. Chinese overcapacity flooded world markets with cheap steel, depressing prices below production cost for many mills. SSI UK could not compete. The plant was mothballed in September 2015 and SSI UK entered liquidation on 2 October 2015. Two thousand two hundred workers lost their jobs. The UK government pledged £80 million in support for the affected region.

SSI Thailand filed for business rehabilitation at the Central Bankruptcy Court in Bangkok, with the application accepted on 10 June 2015. The company owed approximately 50 billion baht ($1.4 billion) to three Thai banks — Siam Commercial Bank, Krung Thai Bank, and Tisco Bank. SSI posted a net loss of 40.9 billion baht in 2015. The Stock Exchange of Thailand suspended trading in SSI shares on 16 February 2016 after shareholders' equity turned negative. The share price had fallen to 3 satang.

The rehabilitation plan was approved by the court, and SSI continued operating at a reduced scale, focusing on its core hot-rolled and cold-rolled steel operations in Thailand. The Viriyaprapaikit family, which had founded and controlled the company, lost their stake. The court terminated the business rehabilitation in December 2023, declaring the company restored to financial health — but the shareholders who had owned it before the collapse were wiped out.

Debt-financed the $469M acquisition with no equity cushion; when prices crashed, the 50B baht debt crushed the company, costing 2,200 UK jobs and a 40.9B baht loss.

SSI financed the $469M Redcar acquisition almost entirely through debt from Thai banks — when steel prices crashed, the company had no equity cushion and could not service 50B baht in loans

The global steel price crash of 2014–2015, driven by Chinese overcapacity, made the UK plant uneconomical — SSI had bet on a market that disappeared

SSI had no contingency plan for a downturn — the company continued operating the UK plant at a loss rather than cutting its losses early, burning through cash that could have saved the Thai parent

An overseas acquisition financed with debt is a bet on two things: the asset and the market. When the market turns, the debt stays.

SSI continued operating in Thailand under a court-approved rehabilitation plan. The Viriyaprapaikit family lost control of the company. The court terminated the rehabilitation in December 2023, declaring the company restored to financial health. The Redcar steelworks was permanently closed, with 2,200 jobs lost and the UK government providing £80 million in support. The case became a textbook example of the dangers of debt-financed overseas expansion in a cyclical industry.