STEELMAKER SSI is to launch a share issue worth about £265m in a move the company said would “enhance its long term financial stability”.

The Thailand-based firm, which employs 1,500 workers in Redcar, Teesside, has been hit by a perfect storm of rising raw material costs and plummeting prices for steel slab on the global markets.

Despite this, it recently reached a major milestone, exporting its one millionth tonne of steel slab since operations restarted in April at the previously mothballed blast furnace.

SSI said a comprehensive financial plan had been approved by its shareholders at an extraordinary general meeting, overseen by its chairman, Win Viriyaprapaikit, in Bangkok, which would enable the firm and its subsidiaries to maintain short-term and long-term financial stability.

The plan involves issuing 19,433,670,324 of new shares at 0.68 baht (£0.01) per share, which if successful would generate about £265m in extra capital.

Phil Dryden, chief executive of SSI’s UK arm, said: “The approval of the plan is very good news for the SSI Group, and for SSI UK here on Teesside, particularly as it is on the back of what has been a very difficult period for steel markets since our operations restarted in April.

“We are looking forward to a successful conclusion of the fundraising exercise during November which will give our business greater financial stability as we head in to the new year.”

SSI has been breaking even in the UK, having invested significantly in its North-East operation and the many firms which supply the Redcar plant.

It hopes to move into profit with the launch of a £35m pulverised coal injection plant adjacent to the blast furnace, which is expected to improve efficiency and increase the output of the steel slab it produces.

Most of the steel that is made at the site is shipped to Thailand, via Teesport, where it is used to make cars and kitchen appliances.

SSI paid Tata Steel £281m for the Redcar site, which was previously operated by Anglo-Dutch company Corus.