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Saturday, January 21, 2012

Lucchini Trieste iron plant may shut from Feb -union

Sat Jan21, 2012

* Workers call strike for next week
* Servola plant halt may put Piombino plant at risk -union
* Meeting of parties involved will take place Jan. 24

LONDON, Jan 20 (Reuters) - Italian steelmaker Lucchini may halt production at its Trieste iron and coke producing plant from Feb. 1 as it is owed an unpaid bill of about 45 million euros ($58 million), a union representative said on Friday.

Workers at the Ferriera Servola plant in Trieste, north-east Italy, have decided to call industrial action for next week against the decision to close the plant but will not put production at risk, Vittorio Bardi, national coordinator for steel at Italian union CGIL-FIOM, told Reuters.

Bardi said Lucchini's managing director, Marcello Calcagni, had told union representatives that a firm owing money had not been paying Lucchini since July.

"He announced that if the problem is not resolved the company will not have the financial means to continue production from Feb. 1."

Lucchini itself could not immediately be reached for comment.

Italian newspapers reported the situation was putting up to 1,000 jobs at risk at the plant, a major European iron producer.

Separately, a source at Lucchini Group, which is an affiliate of Russia's Severstal, said it is producing steel at about 65 percent of its capacity, down from 80 percent a year ago, due to weakening demand.

Italian authorities have planned a meeting between the parties involved in the difficulties at the Trieste plant for Jan. 24 to seek a solution, the union said.

The plant produces pig iron and coke, part of which go to the Piombino plant to be processed into steel, with the remaining volume sold on the international market.

"It is vital to keep the Servola plant working otherwise there will be problems at the Piombino plant too," Bardi said.


Lucchini Group is among a number of European companies that have been forced to cut capacity due to sluggish demand and a deteriorating economic outlook.

"Things are not looking too good in Europe," the source at the group said.

"The outlook is pretty negative: raw materials prices are still too high and clients have no liquidity," the source added.

The Lucchini Group, which included an Italian and a French business unit, produced about 2.4 million tonnes in 2010.

In 2005, Severstal acquired a majority stake in the Italian steel producer, previously owned by the Lucchini family, through recapitalisation.

In 2010 the Russian company sold a majority stake in Lucchini to Severstal's owner, Russia's second-richest man Alexei Mordashov, for 1 euro, to facilitate the sale of the debt-burdened company to a third party.

Last summer Lucchini sold its French business unit, Ascometal, to U.S.-based Apollo Global Management, a move that helped to reduce the debt.

Shareholders and creditor banks of the Italian steel maker reached a final agreement on the restructuring of the group's debt in December last year. Lucchini had been locked for months in debt restructuring talks with Italian banks. ($1 = 0.7740 euros)
(sourced Reuters)

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