Russia's Severstal in talks to sell Lucchini: report

MOSCOW (Reuters) - Severstal CHMF.MM, Russia's largest steel maker, is in talks over the sale of its Lucchini operations in Italy and a deal is possible in the near future, Interfax news agency reported on Saturday, citing a source.

Severstal is in talks with several investors, and may sell either the whole of Lucchini or a controlling stake in it, the unnamed banking source told Interfax.

“The deal can take place in the nearest future,” the source was quoted as saying.

Severstal declined to comment, Interfax said.

Lucchini, Italy’s leading steel maker, makes about 2.2-2.3 million tons of steel a year at its Piombino plant in Tuscany, although production was slashed in 2009 as the global economic crisis crimped demand.

Severstal has also been hit by the crisis, but returned to profit in the third quarter of 2009 thanks to a strong performance at its domestic mills.

Its foreign assets however remained loss making, with Severstal noting that the trading environment remained difficult for its European business in the third quarter. Lucchini had a negative earnings before interest, tax, depreciation and amortization (EBITDA) of $212 million in the first nine months of 2009, according to Severstal’s latest results report.

Writing by Toni Vorobyova; Editing by Toby Chopra