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Italy says Ilva tender was irregular but Arcelor contract still valid

FILE PHOTO: The ILVA steel plant is seen next to the Tamburi district, in Taranto, southern Italy April 27, 2018. REUTERS/Tony Gentile/File Photo

By Alberto Sisto

ROME (Reuters) - Italian Industry Minister Luigi Di Maio said on Thursday that the tender to sell the Ilva steel plant to industry giant ArcelorMittal was illegitimate, but it was not the fault of Arcelor and the sale to the company might still go ahead.

ArcelorMittal won a tender to buy Ilva in 2017 and had been due to take over the ailing firm in July, but Italy's new anti-establishment government put the sale on hold until Sept. 15.

Citing an opinion by state lawyers, Di Maio said Arcelor had been awarded the tender for Europe's largest steel plant without rival companies being allowed to improve the terms of their initial bids.

"As far as we are concerned the tender was illegitimate," said Di Maio, the leader of the anti-establishment 5-Star Movement that governs with the right-wing League.

He said if other companies were to make fresh offers for Ilva there could be the grounds to annul the tender, but in the meantime the contract with the Franco-Indian multinational remained valid.

Di Maio blamed the previous centre-left government for the way the tender had been run, not Arcelor, which he said had always acted in good faith. He confirmed that the Sept. 15 deadline to complete the sale to Arcelor was still in place.

Di Maio has been pushing Arcelor to improve its offer in terms of maintaining jobs at Ilva, which was placed under state-supervised special administration in 2015, three years after magistrates had intervened in the company saying it had to be cleaned up or shut down.

An Arcelor spokesman said the company had acted in good faith throughout the tender process.

"ArcelorMittal remains committed to its acquisition of Ilva and to acting as a responsible owner and operator of the business," the spokesman said. "We hope to receive the support of the government to reach a successful conclusion to union negotiations as soon as possible."

Arcelor promised last year to pay 1.8 billion euros to acquire Ilva, and then invest 1.2 billion to boost productivity and a further 1.1 billion to curb pollution.

(Additional reporting by Robert-Jan Bartunek, writing by Gavin Jones; Editing by Kirsten Donovan)