TPi September 2017

business & market news

ArcelorMittal-led consortium reaches agreement regarding Ilva lease and purchase

with a commitment to keep at least 10,000 employees for the entire duration of the industrial plan, according to the outcome of negotiations with the unions. Ilva is the largest, and only integrated, steelmaker in Italy. Its main production facility in Taranto is strategically located next to one of Europe’s largest deep- water ports, enabling easy access to raw materials. The company also has significant steel finishing capacity in Taranto, Novi Ligure and Genoa. It will provide ArcelorMittal with a primary production presence in Italy, where the company currently has no primary steelmaking capacity.

with rental payments qualifying as down payments against the purchase price. The lease is expected to start around year-end 2017, subject to regulatory authorisations, and the lease period will be a minimum of two years. Investments of around €2.4bn will be made over a seven-year period, including €1.3bn to support an extensive industrial plan, with an investment programme focussed on blast furnaces, steel shops and finishing lines; and around €1.1bn to ensure that Ilva complies with the Integrated Environmental Authorisation (AIA) as set out by the Italian government. Finished steel shipments will system- atically increase to 9.5mn tonnes by 2023. Crude steel production will initially be limited to 6mn tonnes per annum, increasing to 8mn tonnes once AIA provisions are complied with. Crude steel production will be supplemented by imported slabs and hot rolled coil, in order to maximise utilisation of Ilva’s finishing facilities, group of companies, with the head office based in the Netherlands. Hart bv, founded in 1964, is a stockholder and trader in nickel alloy piping products for the oil and gas and (petro-) chemical industry. Mr Gómez has been working for Hart bv in the Netherlands for the last eight years as a sales engineer. He has been responsible for project sales in several regions, including Southern Europe, South America and Southeast Asia. Hart Middle East sales office and warehouse was founded in 2013 and stocks a wide range of nickel alloy piping products used in the oil and gas industry.

ArcelorMittal and Marcegaglia have announced that AM Investco Italy Srl has concluded the exclusive negotiation phase and reached a binding agreement concerning the lease and obligation to purchase Ilva SpA and its subsidiaries with the Italian government. Intesa Sanpaolo will formally join the consortium before transaction closing. Strategic highlights of the agreement include a unique opportunity to acquire a major integrated steel-making asset that is Europe’s largest single steel site, in Europe’s second largest steel market; an investment plan to materially improve Ilva’s environmental footprint and realise its full potential; and identified synergies of €310mn targeted by 2020 (excluding impact from fixed cost reductions and volume improvements). Ilva is expected to be EBITDA accretive to ArcelorMittal in year one, and free cash flow accretive in year three. The purchase price is €1.8bn, with annual leasing costs of €180mn to be paid in quarterly instalments. Ilva’s assets will be initially leased by AM Investco,

Italy imports between 60 and 70 per cent of its flat steel requirements, in part due to a decline in Ilva’s output because of numerous commercial, quality and environmental issues it has faced in the recent past. ArcelorMittal believes that, over time, Ilva’s production levels and competitiveness can be restored. ArcelorMittal – Luxembourg www.arcelormittal.com New general manager at Hart Middle East

Mr Gómez commented, “Before 2013, customers in the Middle East were used to sourcing from Europe or the USA with delivery times of six to eight weeks being common. Now deliveries can be done 24 hours ex works. Hart ME is the only company with extensive stocks in this material in the Middle East. Our philosophy is to bring the stocks to the markets, to be as close as possible to customers worldwide. Hart ME was the first step, followed by a sales office in Abu Dhabi.” Hart bv – Netherlands

Germán Gómez has been appointed as general manager of Hart Middle East FZE in the United Arab Emirates. Hart Middle East is a subsidiary of the Hart

sales@hartbv.nl www.hartbv.nl Hart Middle East FZE – UAE

sales@hartme.ae www.hartme.ae

Germán Gómez, general manager of Hart Middle East

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TUBE PRODUCTS INTERNATIONAL September 2017

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