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Italian steel unions urge swift resolution of Aferpi sale

London (Platts)--16 May 2018 1212 pm EDT/1612 GMT


Italian steel unions are calling for long products maker Aferpi to be returned to special administration should an agreement on its sale not be reached Wednesday between India-based JSW Steel and Aferpi's Algerian owner, Cevital, the unions told S&P Global Platts.

JSW, Aferpi and the Italian government did not respond to requests for comment.

"We believe that the time is now up. The parties have been discussing for too many weeks, and it is time to conclude the negotiations on a definitive solution for the Piombino plant," the FIM, FIOM and UILM unions said in a joint statement to Platts.

The unions added that they hoped JSW would acquire the plant, make the necessary investment and resume steel making at Piombino. However, they said special administration should be on the table as a fallback position to facilitate the sale.

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In March, JSW officially signed a memorandum of understanding to acquire Aferpi from Cevital, but the sale still did not go through, because, market sources said, the two parties could not agree on the sale price.

Piombino has a capacity of around 2 million mt a year.

JSW wants to gain a foothold in the Italian and wider European markets. The company earlier attempted to acquire the largest Italian flats producer, Ilva, but lost out to ArcelorMittal.

Aferpi is a longs producer, with rails its core business. JSW has been supplying Aferpi with blooms since the hot end was shuttered. JSW has said it will maintain longs output, although it will try to produce flat products as well.

At the end of last year, under pressure from the unions, the Italian government started the process of severing ties between Aferpi and Cevital after the latter failed to provide a new, comprehensive industrial plan and industrial partner for Aferpi, which stopped producing steel due to lack of investment and cash for raw materials.

Cevital bought the former Lucchini (then renamed Aferpi) from the government back in 2014 when the company was under special administration.

--Annalisa Villa, annalisa.villa@spglobal.com

--Edited by Jonathan Dart, jonathan.dart@spglobal.com




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