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business & market news
24
TUBE PRODUCTS INTERNATIONAL September 2017
www.read-tpi.comArcelorMittal-led consortium
reaches agreement regarding
Ilva lease and purchase
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,
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,
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.
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.comNew general manager at Hart Middle East
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
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.
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
sales@hartbv.nl www.hartbv.nlHart Middle East FZE
– UAE
sales@hartme.ae www.hartme.aeGermán Gómez, general manager of
Hart Middle East