Decisive week for the former Ilva, the Indian Jindal favored over the American Flacks

This week the story of the sale ofSteel mills of Italyl’ex Ilvacould begin to reach an important stage. Also because in the question time in the Chamber on 1 April, the Minister of Business, Adolfo Urso, said that we are “working assiduously so that it is possible to conclude thenegotiations for the sale of the companyby the end of this month”. Two groups have been on the scene for several days now: the American fundFlacks Group– which more precisely is a family office – and the Indian steel companyJindal International. At the basis of the two offers, two different visions of the relaunch of the steelworks.

Flacksproposes to produce aTarantowhen fully operational, 6 million tonnes ofsteelannouncedinvestments for 5 billionand assures that it will employ 8,500 workers (today those of the former Ilva are just under 10 thousand). Very different proposals, therefore, but now the central element – for the purposes of evaluating which of the two offers to choose to continue the negotiation – is given by theguarantees of the two groups.

Jindal’s proposal

Jindalon the other hand, would invest a billion and a half, could employ 4,500 units, but above all it would produce directlyTarantoin a first phase until 2030, and waiting for theelectric ovens4 million tons per year using two of the three current blast furnaces, and then it would move to producing only 2 million tons in Taranto with a single electric furnace (the two previously used blast furnaces would be turned off). Jindal would bring 4 million tons of gas to the Apulian citysteel slabsto be processed. These slabs they would come from Oman once Jindal has put the new steel mill into operation with two electric furnaces and two pre-reduced plants to power the same electric furnaces.

The orientation towards Jindal

In the call that Minister Urso had in recent days with representatives of the institutions ofTarantoGenoa, Puglia and Liguria, the impression – and perhaps more than one impression – that the administrators from Taranto and Puglia have gained is that we could move towards an assignment of the company toJindal. In truth, nothing has been decided yet, but when Urso spoke to the local institutions, he could not help but highlight that the steps ofFlacksthey still remain slow and do not allow us to clearly understand whether the potential American investor is truly capable, especially financially, of tackling a very complex operation like that of the former Ilva.

Doubts about Flacks’ guarantees

“Flacks– explain sources close to the dossier – it is a family office, therefore it has its own funds, but we would have expected it the letter from an insuring bank the availability of resources at Flacks’ disposal. Flacks has a lot of companies and real estate, but so far on the table he didn’t put anything concretehas not presented anything that allows us to fully evaluate it.” And in a letter to the commissioners, Flacks wrote that “in the absence of clear feedback on the status of the purchase and sale agreement, our ability to discuss binding commitments by financial institutions is significantly and materially limited. No buyer in any merger or acquisition process is ever required or agreed to provide financing commitments for a five-year business plan or equity capital to secure such commitments, said Flacks, who said he has $2.2 billion in real estate assets, especially in the context of an asset in great difficulty'”.

The comparison with Jindal

As for the comparison withJindalsources close to the dossier report that “a lot of work is being done and parallel tables are underway to address the various topics. Jindal at the moment he is proving to be convinced and that’s a good thing. Whether we manage to get to the bottom of it remains to be seen. We can’t say that yet.”