June 25, 2018 / 5:04 PM / in 2 months

Italy to ask for postponement of Ilva handover to ArcelorMittal: sources

ROME (Reuters) - Italy’s new government will ask for a postponement of a planned July 1 handover of the Ilva steel plant to ArcelorMittal (MT.AS) as it seeks more time to rejig the terms of the deal, two sources with knowledge of the matter said.

The government is also thinking of giving Ilva a bridge loan to allow the steelmaker, the largest in Europe, to cover its production costs in the coming months, the sources said.

ArcelorMittal declined to comment while a spokeswoman for Industry Minister Luigi Di Maio said she could not confirm the delay or the loan.

Ilva, based in the southern city of Taranto, has been dogged by charges of corruption and environmental crime for years - charges that it denies.

In 2012, Italian authorities ruled that emissions from the plant had caused deaths, tumors and respiratory diseases. The state took full control in 2015 and about half Ilva’s annual 11 million-tonne capacity was eventually mothballed.

Last year ArcelorMittal, the world’s largest steelmaker, reached a 1.8-billion-euro deal with the previous Italian government to buy the troubled steelmaker.

It pledged to invest another 2.3 billion euros to clean up and modernize the plant but said it wanted to cut 5,500 jobs out of a total of 14,000 by 2023.

The Indian steel giant has still not reached an agreement on job cuts it could agree to and a delay could help it find a compromise with Rome’s help, one of the sources said.

The 5-Star Movement, a member of the new governing coalition with the far-right League, has previously said it wants to completely eliminate polluting emissions at the Taranto plant.

Di Maio, head of the 5-Star, will likely decide in the next few days what to do on Ilva after meetings last week with ArcelorMittal, the unions, environmental associations, local authorities and the commissioners, his spokeswoman said.

Reporting by Massimiliano Di Giorgio, additional reporting by Maytaal Angel in London; writing by Francesca Landini; editing by David Evans

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