JSW may conclude takeover of Lucchini in a month

Sajjan Jindal-owned JSW Steel is in the final stages of negotiations to buy 'part' of bankrupt Italian steelmaker Lucchini.

"We are at an advanced stage of negotiations. We hope to close the deal in a month's time or so," JSW Senior VP (Global Sales), Sharad Mahendra said at 'Steel Round Table' organised by The Bengal Chamber here today.

Lucchini is also reported to have received a binding offer from JSW Steel for its core assets in Piombino and is considering the offer.

Mahendra said JSW is only keen to take over assets of one-million tonne steel rolling mill of the Italian company for steel processing and not the steel making facility.

The Piombino plant on the Tuscan coast includes a blast furnace, a steel mill, a coke plant, three re-rolling mills and facilities at the port.

According to foreign media reports, the leading labour union has expressed opposition to any 'piecemeal' sale.

Asked about investment in the takeover, Mahendra said, "There will be no major upfront investment. Most capital requirement would be for working capital."

He said the Italian government is keen on the transaction for sake of employment and value added products.

The deal will give JSW access to European steel market and export opportunity for semi processed steel to Europe.

"We want to export our Indian semi-steel products like billets for processing and selling in Italian and other European markets," Mahendra said.

Meanwhile, speaking about the iron-ore issue, Mahendra said supply constraints from domestic sources has forced JSW to import iron-ore from markets like Canada, South Africa and Brazil.

"We are already importing and total import of iron-ore would be 6-7 million tonne on an annual basis as things stand now," he said.

It was nil last year and most of the imports would be meant for 10 million tonne Karnataka plant, capacity of which would get ramped up to 12 million tonnes by December.