Lucchini Group, the Italian steelmaking division of Russia's Severstal Group, is safe. Agreement between the management of the Brescia-based company and creditor banks was reached on July 6 at a meeting in Rome, in the presence of Italy's Undersecretary at the Ministry of Economic Development Stefano Saglia.
Accordingly, the agreement was reached on the basis of the freezing of 100 percent of the corporate debt (€770 million) and the granting of a €78 million bridging loan and €48 million in letters of credit.
This means that the prospect of bankruptcy has been warded off, as the agreement ensures Lucchini Group has the liquidity needed to run its plants and to test the water for an eventual sale of the company - which may be sought by Russian business magnate Alexey Mordashov.
Furthermore, the signing of the agreement clears the way to the sale of the French group Ascometal (subsidiary of Lucchini), for which a meeting has been scheduled on July 7 in France. Rumors say that Apollo Management L.P., a US private equity investment firm, presented an offer worth €300 million in late May.
Mr. Saglia commented, "The route has been delicate and complicated, with the decisive intervention of the government and local institutions. We were able to preserve employment and the company assets. The debt will be frozen and new guidelines will regulate new finance and the reorganization of the company."