Ilva, joint plan B: Arvedi-CDP-Delfin

Genoa - The Board of Directors of publicly controlled joint-stock companyCassa Depositi e Prestiti (CDP) has scheduled a meeting for this morning. On the table is plan B of the consortium led by Giovanni Arvedi for the lease/purchase of the Ilva steel plants in Taranto, Genoa and Novi Ligure

di Gilda Ferrari

Genoa - The Board of Directors of publicly controlled joint-stock company Cassa Depositi e Prestiti (CDP) has scheduled a meeting for this morning. On the table is plan B of the consortium led by Giovanni Arvedi for the lease/purchase of the Ilva steel plants in Taranto, Genoa and Novi Ligure. Ilva employs 14,000 employees, and production this year is estimated to reach 5.8 to 6 million tons of steel, compared to 4.5 million in 2015. Giuseppe Arvedi, owner of the eponymous steel company, speaking in the Senate had hinted earlier that a plan to take over troubled Ilva would “go forward even without Erdemir,” and he’s keeping his word. Following the backtracking of the Turkish financial partner in the deal, Erdemir Group, that has chosen to wait until November - to see how the Taranto plant’s environmental issues will be addressed - before deciding whether to participate or not, the need has arisen to review the details of the offer presented by the consortium that brings together Arvedi, Italian businessman Leonardo Del Vecchio and CDP. In the course of this morning’s meeting, the board chaired by Claudio Costamagna and led by Fabio Gallia, will decide on a new line of action.


PLAN B, ACCORDING TO ARVEDI

The 30-35% share that was supposed to be held by Erdemir will be divided among the other parties of the consortium. As calculated by Secolo XIX-the MediTelegraph, CDP would have a share of around 45%, while Del Vecchio’s Delfin would hold a further 30-35% and Arvedi would take up the remaining 20-25%. The three would thus create a new company; the cost of leasing the Ilva plants would be around €900 million and the deal would include the obligation to purchase after December 2018. Banks are expected to support the plan by opening new credit lines for a further 500 million. Underlying this shareholding structure is a pact on governance which will likely place Arvedi at the head of the new company, while its CEO, primarily tasked with technical aspects, could be decided jointly. The industrial business plan, which Arvedi presented to Italy’s Senate the same day as Erdemir’s decision to wait in the sidelines, provides for the restoration of blast furnace 5 and its restructuring of a hybrid plant, partly fuelled by gas (as long as the gas is competitively priced). In 2015, Arvedi Group produced 4 million tons of steel, this year Ilva’s output is estimated to rise to around 5.8 and 6.0 million tons: according to Mr. Arvedi the two groups could reach a joint production target of 12 million tons per year, utilizing steelmaking methods compatible with the environment. While the Turks are left out for now, the decree on the sale of Ilva allows for their inclusion at a later date.


AN ALTERNATIVE CONSORTIUM
The other joint bid is composed of the Marcegaglia Group and the French-Indian steel giant ArcelorMittal: the two have already formalized an agreement and should present it for tender by Thursday, 30 June. In this case, for the initial stage, the industrial plans set out a production of up to 6 million tons, in fact little higher than the current one. In the Senate, Arvedi had attempted to, somehow, reach out to Marcegaglia - recalling his “esteem” for the family and stating that “this is no time for conflicts between us,” perhaps with the aim of patching together a broader take-over team. But on this issue, Antonio Marcegaglia, while renewing the invitation for CDP to be part of the team, restated the allegiance that binds him: “We have always stood next to ArcelorMittal, it’s a matter of their industrial and financial strength. The commitment on part of Mittal is rock solid and guaranteed for the medium term, as it’s interested in a greater presence in Italy to reinforce its market penetration.”

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