Negotiations with the two bidders for the sale of Acciaierie d’Italia (ADI) are becoming increasingly complicated, Kallanish observes.
The protracted process also reflects the reluctance of banks and credit institutions to finance the relaunch of the Taranto site, which remains in a complex legal situation following the judiciary’s seizure of one of its blast furnaces last year over pollution concerns, creating an unresolved chain of responsibilities.
Flacks Group confirms it has asked the government for a vendor loan to support the site’s relaunch. “Not one bank after talking to 30 banks would lend money due to the court seizure of the Taranto site in November and all the issues surrounding Ilva,” Michael Flack tells Kallanish.
He adds that the slow Italian system, which needs to take into account Taranto’s level of pollution and the legal intricacy of the situation, is making the process extremely complicated and long. The vendor loan is intended to finance the relaunch of Ilva for the first six months after Flacks is awarded the plant.
Meanwhile, Jindal’s offer appears to have stalled, with sources close to the dossier believing it has not been retained. This comes amid market rumours the steelmaker has not provided financial guarantees as required.
The proposed plan involves boosting Taranto’s re-rolling capacity rather than primary steelmaking. Over the next four years to 2030, the Taranto plant would operate with two blast furnaces while one electric arc furnace is constructed. From 2030 onwards, the blast furnaces would be shut down and dismantled, with production shifting to EAF steelmaking. Sources have previously said these plans could result in the permanent loss of capacity, with employment also impacted.
By contrast, the plan presented by Flacks Group involves ramping up crude steel output at Taranto to 6 million tonnes within 18 months of completion of the sales process. This includes maintaining a workforce of over 6,000 employees, installing three EAFs and a 100MW solar plant on site, and potentially developing a DRI unit as the blast furnace route is gradually phased out.
Jindal has been contacted for comment by Kallanish.
