Ilva’s future at a crossroads as today is last day to submit bids

There will be two consortiums participating in the tender offer for the sale of the assets of Ilva, the loss-making Italian steel group under state-appointed management. The deadline for the call for competitive bids is set for today.

The first team, which had already emerged in the past weeks, is composed of the Franco-Indian group ArcelorMittal and by the Marcegaglia group, which is a big transformer of the commodity (in 2014 it produced 5.3 million tons of plans and tubes, drawn bars, heavy plates) and the main client of Ilva (this year it should purchase approximately one million tons). 

The other consortium will be all Italian. Rechristened AcciaiItalia, it sees the participation, as the leader, of the Arvedi group (it is a producer of approximately 4 million tons and it is the main competitor of Ilva on the Italian market) with the financial support of Delfin (it is the family holding of the entrepreneur Leonardo Del Vecchio, the principal owner of Luxottica group) and of Cassa Depositi e Prestiti.

The process set up by the Ilva commissioners now requires at least four months of analyses by a committee of experts appointed by the Ministry of the Environment. The business plans and bids will be examined only at a later date, once the admissibility of the environmental proposals has been decreed.

The two business plans differ in objectives and technologies, in addition to the composition (on one hand, a transformer plus a world-caliber producer, on the other hand, a state agency, a financial holding and a producer that is a competitor of Ilva on the Italian and regional markets). In recent days, some observers hoped for a possible link-up between the two consortiums, but the first approaches between the management of Arvedi and of Marcegaglia don't seem positive at this time.

None of the three members of AcciaiaItalia will have a share greater than 50%: an issuing of bonds by the banks is planned to finance the project. CDP will have a role as anchor investor, while Arvedi will be entrusted with the company management of the steel complexes that, with all likelihood, will be taken over with a rental contract. Both of the offers, however, have still not yet been officially filed.

Some time ago, CDP initiated a series of discussions with Arvedi, Delfin and the Turkish Erdemir, in order to set up a consortium. The institution remained, however, officially in stand-by in these months, not excluding the possibility of participating alternatively in the consortium, already formed between Marcegaglia and ArcelorMittal, as was hoped for on several occasions both by Emma and Antonio Marcegaglia, respectively CEO and Chairman of the Mantua group.

In late January, at a hearing, the CEO of CDP, Fabio Gallia, made known that the institution was “available to support a project able to allow the company to become competitive once again,” though participating, he pointed out, “with a minority share.”

In late May, CDP was “forced” to partially come out into the open, helping Delfin to qualify for the tender offer: by failing to have submitted expressions of interest, Del Vecchio's holding had to associate itself with CDP to officially join the sale mechanism.

Alongside the two financial partners, the Italian consortium will rely on the Arvedi group, which has recently reaffirmed its resolve to take on an industrial role and as leader on the team, conferring its assets in a newco in a possible second phase of the transaction.