THAI steelmaker SSI has approved a loan worth millions of pounds to strengthen the company’s capital structure, raising hopes of expansion on Teesside.

It’s hoped a third caster can be built at SSI Teesside concast plant to head off any potential production bottlenecks that may arise, as steelmaking at the plant ramps up.

Mr Win Viriyaprapaikit, group chief executive and president of SSI, said: “With the successful start up of SSI Teesside, SSI has achieved another major milestone.”

He said the board of directors had given the go-ahead for the “issuance and offering of convertible debentures” - a loan worth THB 1,650m (£33.1m) that can be converted into stock - and a capital increase plan.

“These will allow the company greater flexibility in strengthening its capital structure and raise additional working capital to support the expansion of production capacity,” Mr Viriyaprapaikit added.

The first slab of steel rolled off the production line after the blast furnace was relit last month, in an historic moment for Teesside.

The first shipment of steel is due to leave Teesside next week.

SSI bought the Teesside Cast Products plant as part of a £320m acquisition from Indian-owned Tata Steel in February 2011.

The plant had been mothballed earlier that year with the loss of 1,700 jobs.

The blast furnace at Redcar - the second largest blast furnace in Europe. Teesside has the capacity to make 3.5m tonnes of steel slabs a year.

Mr Viriyaprapaikit added: “Other than the offering of the convertible debentures, the board of directors has considered other possibilities, including a SSI share offering via a general mandate which will be subject to market condition and or, alternatively, sales of new SSI UK shares to potential strategic partners.

“After completion of the convertible debentures issuance, these other alternatives are to be considered on their suitability and benefit to the company.”