JSW Steel is poised to take over three special steel re-rolling mills of bankrupt Italian steelmaker Lucchini located in Tuscany province. The three units together have the capacity to re-roll 1 million tonnes of steel.

JSW Steel’s Senior Vice-President (Global Sales) Sharad Mahindra confirmed that the company was indeed in advanced negotiations for the asset purchase. The deal for acquiring the asset at a “nominal cost” could come through within weeks, he indicated.

Observers familiar with Italian bankruptcy laws, said JSW might pay a token amount of one euro each and provide an undertaking to keep the units running without job cuts for a stipulated period.

JSW official, however, declined to mention the proposed price. JSW would not have to make an upfront payment but keep the mills in operation to keep the existing employments, he said.

The deal, which is being supported by the Italian Government as well as the bankruptcy court, was mainly to protect around 1,100 existing employees and value-addition in Italy.

Lucchini, which was declared bankrupt in 2012 and was placed under special administration, has a steel plant, coke oven unit and port facilities, apart from the re-rolling mills.

However, JSW was not buying the steel-making and other assets. JSW, which intends to export semi-finished steel items from its Indian units to the Italian re-rolling mills for producing finished products for the European market, will have the rights to access Lucchini’s port facility on the Tuscan coast.

Mahendra admitted that JSW, which began importing iron ore this year, might end up importing around 7 million tonnes of ore during the financial year. Last year it did not import at all. Lower ore prices and sea-borne logistic costs against domestic supply constraints and higher prices have prompted the company to resort to import of the raw material.

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