Thai Banks Face Biggest Default Since '97 as Steel Venture Fails
- Sahaviriya Steel defaulted on $1.4 billion of loans Monday
- Company will halt U.K. output, start debt restructuring talks
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Teesside, a gritty steel making district in England’s north east, is almost as far removed as you can get from the steamy streets of Bangkok. The two collided this week to inflict the biggest default on Thai bankers since the Asian financial crisis.
Sahaviriya Steel Industries Pcl, the Bangkok-based operator of Southeast Asia’s largest flat-steel manufacturing complex, reneged on 50 billion baht ($1.4 billion) of loans Monday following the failure of its four-year old U.K. venture. The group said it was suspending production at the Teesside plant, which employs about 2,000 people, amid a drop in prices and a supply glut stemming from slowing economic growth in China.