(Bloomberg) -- Jindal Steel raised its offer for a troubled Italian steelmaker to about €4 billion ($4.2 billion), seeking to outbid rivals from Azerbaijan, people familiar with the matter said.
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The Indian steelmaker’s latest proposal to the Italian government consists of a payment of about €1 billion for the assets, plus around €3 billion of investments to revamp the main steel plant in Taranto, the people said, asking not to be identified as the discussions are private.
The Italian steelmaker, once one of Europe’s largest, has been mired in controversy and disputes for years. The company, formerly known as Ilva, is currently under a state-administration regime, and the Taranto plant has operated at reduced capacity.
Prime Minister Giorgia Meloni’s government is expected to pick a winning bidder in the coming weeks. A tender for steelmaking assets, including the Taranto unit, was launched after a clash with operator ArcelorMittal led to returning control back to the state.
Bedrock Industries Management and a consortium formed by Baku Steel Co. and Azerbaijan Investment Co. are also bidding.
The plant’s blast furnaces are currently running at a rate of about 2 million tons a year. The Italian government is seeking a bidder that will inject sufficient funds to restore production to levels as close as possible to the plant’s peak annual capacity of 10 million tons.
Jindal had previously offered a total of €2 billion, in a proposal that included a gradual shutdown of blast furnaces, the construction of two electric arc furnaces and a direct reduced iron (DRI) plant aiming to produce 6 million tons of steel per year, the company’s director of European operations, Narendra Kumar Misra, said in January to the Italian daily Il Sole 24 Ore.
In the current proposal, the payment for the assets will comprise about €500 million in cash and approximately €500 million of inventories, the people said.
Baku had offered around €1 billion for the asset, newspaper Il Messaggero reported in February.
Representatives for Jindal and the Italian government declined to comment.
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