Senior officials of Indian steel producer Jindal South West Steel (JSW Steel) and Italian steelmaker Lucchini are working at present to define a new proposal by Jindal to purchase the assets owned by the Italian company, which was formerly owned by Severstal but was declared insolvent in 2012, as reported by Italian media sources.
Agreement between the parties should be reached by the middle of the current month. The original offer of Jindal, made on July 14, was described as "disappointing" by the special commissioner of Lucchini, Piero Nardi, and the Monitoring Committee of the Italian Ministry of Development. At the end of August, Nardi flew to India in order to seek an improvement in Jindal's offer in terms of both its economic and employment aspects.
Some progress has been made in the talks, because, if initially there was talk of a symbolic price of about €10 million, now the price offered by the Indians should be higher, though still too low to satisfy all the preferential creditors and some of the unsecured creditors. The issue of fundamental importance for the closing of the agreement, however, is the one related to redevelopment and employment. For the moment, Jindal is still interested in buying the assets mentioned in the previous binding offer, namely the three rolling mills and Piombino's port assets. The margins of negotiation concern the site areas: Jindal apparently wants to buy site areas with a smaller perimeter, i.e., approximately 10 percent smaller compared to the original proposal.
In the meantime, there is no news about the employment issue (the previous offer aimed at keeping about 700 jobs), but Jindal will still have to deal with local unions once the Indian Ministry of Economic Development gives the green light for the acquisition.