The sale of ADI to Flacks will be completed by April
The sale of Acciaierie d'Italia (ADI) to the American investment fund Flacks Group is expected to close in late February and at the latest in April, founder and CEO Michael Flacks told Callanish.
The Italian government will own a 40% stake, and steel production at the Taranto steel mill is expected to grow to about 4 million tons per year from the current 2 million tons per year within 12 months of completion, with 8,500 employees. An official announcement by the government on the transfer of the former Ilva site to the Flacks Group is expected this week.
Production at Taranto is expected to reach 6 million tons within 18-24 months after the deal closes. Initially, the plant will operate with one blast furnace, but it is planned to restart the second one.
"Italy has great steel needs, but it produces only half of what it needs," says Flacks, adding that the steel mill is expected to reach a turnover of about 4 billion euros ($4.66 billion) in the first year as "significant changes" take place in the company. The Flacks plan provides for the replacement of existing blast furnaces with three electric arc furnaces.
In December, Flacks Group became the preferred bidder for the acquisition of the former Ilva and its assets over rival Bedrock. The steel producer will be renamed Ilva. The deal involves an investment of 5 billion euros ($5.89 billion).
In an interview with Kallanish last month, Flacks called the project "the most exciting." He noted the large scale of the Taranto plant, the large port and the potential for the modernized enterprise to reach 12 million tons of products per year in about 12 years. The Taranto plant offers opportunities beyond steel production, including renewable energy and data center development.
Author: Natalia Kapra
Kallanish.com