Bloomberg News

Ilva Says It May Consider New Investors, Recapitalization

February 01, 2013

Gruppo Riva may seek new investors and raise capital at its Ilva steel plant, which was partially shut by prosecutors probing environmental violations, Chairman Bruno Ferrante said.

Ferrante, who met with government officials last night, said in an e-mailed statement that the company is “working on a financial-sustainability plan” that would allow it to carry out environmental improvements at the site. To implement the plan, Ilva needs “a certain regulatory framework,” which is currently unclear due to the action of the judiciary, Ferrante said.

Prosecutors in July ordered the seizure of about $2 billion of Ilva assets and demanded the arrest of some top executives on suspicion they knowingly neglected environmental controls at the plant in Taranto, Italy, contributing to high cancer rates in the area. Milan-based Riva denies responsibility for health issues in the region. Ferrante asked prosecutors last month to release the steel stocks so the company can pay workers and make environmental improvements.

Ferrante said in yesterday’s statement the company has the resources to pay January wages. Previously Ilva officials had said it could pay salaries only if assets were released. The company is set to meet labor unions in Taranto today.

Ilva accounts for 30 percent of Italy’s steel production and about 12,000 jobs in a city where unemployment tops 30 percent. Ilva generates 75 percent of the province of Taranto’s gross domestic product, according to the company.

To contact the reporter on this story: Chiara Remondini in Milan at cremondini@bloomberg.net

To contact the editor responsible for this story: James Ludden at jludden@bloomberg.net


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