Steelmaker Corus could be about to enter its worst 72 hours of business as it fights the Dutch legal system in an effort to safeguard its future. Business Editor Mike Parker looks at the problems the firm faces.

THURSDAY, March 13, was always going to be a black day for Corus.

The steel producer was expected to stand before the City and reveal massive losses for the past year's trading.

That has now been postponed for 24 hours until Friday. But what will replace it could be even more damaging for a group that employs 26,000 workers in the UK, 3,600 of whom are in the North-East.

Tomorrow is now expected to bring a decision by a Dutch judge on whether it can sell its valuable aluminium assets to French firm Pechiney for 750m euros (£516m).

Experts do not fancy the London-based board of directors' chances when the revenue from the sale is likely to be poured into the cavernous black hole that represents Corus's UK debt problem.

The Dutch supervisory board - set up when British Steel merged with Hoogovens - exercised its veto on Monday evening, effectively banning the aluminium sale.

It had demanded assurances from Corus bosses that the money would be used to restructure - ie, finance redundancies from job cuts - in Port Talbot, Wales.

Those assurances were not forthcoming and Corus was left seeking legal redress.

According to Corus Netherlands' central works council, the legal outcome could be irrelevant.

It suggested yesterday that Pechiney was treating the matter as "entirely internal to Corus" but added: "Corus and aluminium manufacturer Pechiney have announced that the sale of Corus's aluminium downstream activities to Pechiney will not be going ahead."

Without vital revenue from the sale, Corus is in a dire financial position.

Reports out of the City suggest that it has yet to finalise a deal to bankroll further its £1.1bn debts. Losing the aluminium sale would compound that problem.

John Johnson, steel research manager at business analysts CRU International, believes the Teesside operations may lose out if Corus has to look within its UK operations.

"In terms of scale, Teesside is the smaller of the bunch. On these grounds, you could say Teesside is the weakest link. Unfortunately, scale does matter in production."

Teesside lags behind other Corus bases when it comes to slab capacity.

Ijmuiden and Port Talbot produce between 4.5m and 5m tonnes each, Scunthorpe weighs in with 3.5m and Teesside brings up the rear with 1m.

Jonathan Aylen, senior lecturer at the University of Manchester Institute of Science and Technology's centre for manufacturing, said that extra capacity could be found at Port Talbot and in the Netherlands to cope with the sale or disposal of Teesside.

"The two main worries would be Teesside and the finishing end of Llanwern (Wales)," he said. "The only feature about Teesside that makes it sexy is the investment in the extensively-rebuilt section mill that could remain as an island site."

Corus's problems are compounded by the fact that it could not retreat from Teesside without facing crippling payments for cleaning up the environment.

One possible way round this would be to look for a buyer for its Teesside operations as swiftly as possible.

As reported in The Northern Echo last month, a long products manufacturer such as Salzgitter in Germany could show an interest in taking over part of Corus, which benefits from extremely high productivity.

Chris Paul, analyst at stockbrokers Brewin Dolphin, said: "The Corus management have dug themselves deeply into a hole and they do not seem to have any ideas of how to dig themselves out again."

The last refuge for the Corus board could lie in the City itself, but the outcome might not be pretty.

Mr Paul said: "I think the best bet for survival is a huge equity-for-debts swap which means the banks will end up with everything and the poor, old shareholders will have nothing.