The closing of the sale of Acciaierie d’Italia (ADI) to US investment fund Flacks Group is expected to take place between late February and, at the latest, April, founder and chief executive Michael Flacks tells Kallanish.
The Italian government is set to hold a 40% stake, while crude steel output at the Taranto steelworks is expected to rise to around 4 million tonnes/year from the current 2mt within 12 months of completion, with a workforce of 8,500. A government announcement awarding the former Ilva site to Flacks Group is expected still this week.
Output at Taranto is then anticipated to reach 6mt within 18-24 months after the deal closing. Initially, the plant will operate with one blast furnace, with plans to restart a second.
“Italy has strong needs for steel and it’s only producing half of what it needs,” Flacks says, adding that in the first year the steelmaker is expected to achieve turnover of around €4 billion ($4.66 billion) as the company undergoes “significant change”. Flacks’ plan includes replacing the existing blast furnaces with three electric arc furnaces.
In December, Flacks Group emerged as the preferred bidder against rival Bedrock in the tender for the former Ilva and its assets. The steel producer will be renamed Ilva. The transaction involves a €5 billion ($5.89 billion) investment commitment.
Speaking to Kallanish last month, Flacks described the project as “most exciting”. He noted the large scale of the Taranto site, the large port, and the potential for the modernised facility to reach 12m t/y production within about 12 years. The Taranto site offers opportunities beyond steelmaking, including renewables and data-centre development.
