Offer for Italian Steelmaker Lucchini Below $100 Million: JSW

Mumbai/London: JSW Steel has offered less than $100 million (Rs 600 crore at 1 dollar = 60 rupees) for troubled Italian steelmaker Lucchini's core assets in Piombino and will not take on any of the company's debt, JSW chairman Sajjan Jindal said on Monday.

The comments were Mr Jindal's first since Lucchini, Italy's second-largest steelmaker by capacity, announced late last week that it was considering a binding offer from JSW.

"The Lucchini acquisition cost will be sub-$100 million," Mr Jindal told reporters on the sidelines of a Mumbai lecture series, adding that JSW would not take on any debt.

A spokesman for Lucchini declined to comment.

Lucchini, previously owned by Russia's Severstal, was declared insolvent in 2012 and placed under special administration - a procedure designed to save large companies and avoid heavy job losses.

Italian media reports had previously speculated that heavy liabilities and a need to protect jobs meant that Lucchini could be sold for only one euro.

"The fact that JSW are not assuming any debt is positive. EU steel demand is about 30 per cent below the 2008 financial crisis, and Italy was back in recession in Q2 2014, so JSW are not buying something that has upside in the short or even the medium term," said VTB Capital's head of commodities research, Wiktor Bielski.

The Piombino complex employs about 2,000 people and can produce 2.5 million tonnes of steel a year. The Italian government has taken a keen interest in its sale as it struggles to pull the country out of its third recession in six years.

Copyright @ Thomson Reuters 2014