Italy's Lucchini to ask JSW Steel to lift its offer

JSW Steel offered less than $100 mn for the Italian company's core assets in Piombino on the Tuscan coast

Troubled steelmaker Lucchini said on Tuesday it planned to ask India's JSW Steel to raise its offer of less than $100 million for the Italian company's core assets in Piombino on the Tuscan coast.

Lucchini, Italy's second-largest steel plant by capacity, was previously owned by Russia's Severstal, but it was declared insolvent in 2012 and placed under special administration. JSW so far has made the only binding offer.

Italian media reported on Tuesday that Algerian family-owned conglomerate Cevital was ready to offer $300 million for the assets and commit to building two electric arc furnaces in Piombino.

JSW's plan is to use Piombino as a processing facility, bringing the steel in from elsewhere rather than producing it locally. Italian labour unions are opposed to such a piecemeal sale because it would mean job losses.

 

"We will ask the Commissioner to evaluate every offer and not just the most advanced one. We understand Cevital would keep steelmaking alive in Piombino, whereas JSW would not," said Gianni Venturi, national co-ordinator for Italian union FIOM CGIL.

The Cevital group includes, mining, food processing, auto distribution and a variety of manufacturing businesses in areas such as glass, cement and metal working.

Both Cevital and JSW could not immediately be reached for comment.

The Piombino complex employs about 2,000 people and can produce 2.5 million tonnes of steel a year. The Italian government has taken a keen interest in its sale as it struggles to pull the country out of a third recession in six years.