Ilva, an Italian maxi-consortium could emerge / FOCUS

Genoa - Which Italian company, even a large one, has the necessary and sufficient funds? Marceglia and Arvedi believe they can do it, but most union sources think that the weight of the operation cannot be supported by either of these two groups alone.

di Simone Gallotti

Genoa - “The victory of an Italian consortium would be desirable: it is the best solution because it seems that the foreigners are only interested in the market.” Antonio Gozzi, president of Federacciai is also the leader of the Duferco group, “but we pulled out from Ilva’s privatization: it is beyond our strength,” he reiterates to Secolo XIX- MediTelegraph. In fact, the main obstacle for the company’s suitors is primarily economic: in the last four years, no regular or special maintenance has been carried out in the Ilva factories and in order to bring the facilities to a level of competitive efficiency required by the market, it would take “at least €1 billion,” as the more cautious analysts estimated. However, this estimate does not take into account the approximate 250 million to be invested on the blast furnace 5, the largest in Europe, which needs a massive intervention. Therefore it is likely that the necessary investments that would make the Italian steel factory competitive again and make up for the lost time, in the opinion of other analysts, would be at least €2 billion.

Which Italian company, even a large one, has the necessary and sufficient funds? Marceglia and Arvedi believe they can do it, but most union sources think that the weight of the operation cannot be supported by either of these two groups alone. That is why perhaps the whole sector could give rise to a widespread consortium that might unite not only manufacturers, but also part of the steel logistics industry. Large and small companies banding together under the tricolour flag, to bear the economic burden of the operation and outdo the “foreigner”, namely ArcelorMittal. It is the operation of the “Courageous Steel Captains”, which is similar to the Alitalia operation under the Berlusconi government. The support of the Executive would be tangible in the case of Ilva, with the participation of the Deposits and Loans Fund, probably through the Strategic Fund. The most difficult part of the operation is Ilva’s management and the creation of a strategy that will navigate through an industry in deep crisis - with negative forecasts for 2016 – that will face losses of over 100 million a year, at least in the first two years.

The other option is the giant ArcelorMittal, the foreign corporation who, according to union and industry sources, wants Ilva to lead the market and try to cut the excess production capacity that besets the sector globally. In the statement published by the government, there is also the option of “lease concession” with a final acquisition. This is the part that the Fiom fears the most, because it opens up the possibility that the company could be broken up if the single sale does not get through, “It would be a desperate move,” analysts said. Instead, some industry sources see it as a guarantee clause for buyers: “Come in, see how it goes and if insurmountable problems arise, leave.” Which problems? Not only economic, because of the perfect storm that is Ilva but also on the judicial front there are a good deal of issues for which the outcome is unknown. Meanwhile, on the legal nature of the transaction, “Ilva was not expropriated from the Riva family,” explains Bruno Manganaro, leader of Fiom Genoa, “and the factory is still formally in their hands, although in a status of receivership.” It is unlikely that the Riva family will remain distant and they could take the appeal route. Less optimism in the operation and its timeline means the solution of this affair could be postponed to this coming autumn instead of the summer.

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