SSI Redcar steel workers warned of 'more bad news' Published duration 2 October 2015

image copyright PA image caption The crisis in steel prices is being blamed on a surplus of cheap Chinese product on the world market

Workers at Redcar's SSI steel plant have been warned to "brace themselves" for further bad news.

On Monday, it was announced it was being mothballed , with the loss of 1,700 jobs.

The government has announced a financial package of "up to £80m" to support workers and local businesses.

But it also warned that as the Thai parent company had filed for papers in an insolvency court overnight there was "probably bad news to come".

The company posted on its website that it had entered "rehabilitation" under Thai law.

This means that, with its liabilities exceeding its assets, a planner would be appointed - effectively an administrator.

The knock-on effect for the Redcar plant is uncertain, although it could potentially open the way for a take over.

However, no access to money may also lead to the coke ovens - which are being kept alight to allow the possibility of production resuming in the future - running out of fuel.

'Never made a profit'

The government said that SSI wanted ministers to make an "open-ended funding commitment" to maintain the coke ovens, but this would have been "in breach of state aid rules".

The Department for Business said in a statement: "On the basis of the limited business case it was given, the government has no confidence that this is a realistic proposal for taxpayers to support.

"The company has never made a profit and the board's proposal would do nothing to address the huge debts outstanding to local suppliers and other parties."

Business secretary, Sajid Javid, said the government would do all it could to help affected workers and their families.

Details of a funding package are still being worked through but the government said it would include retraining for workers and help for those setting up small businesses.

Mr Javid also warned: "News that we had overnight, which is that the parent company of SSI in Thailand has itself filed for what's called rehabilitation in an insolvency court means there's probably some more bad news to come.

"I think that we'll hear later on in the day from SSI itself."