JSW Steel has put its Italian businesses, which were acquired in 2018, on the block as rising raw material costs and geo-political issues hindered its operations and attempts to revive them failed.

The company had acquired the entire stake in three Italian businesses – Aferpi SpA and Piombino Logistics SpA – and 69.27% in GSI Lucchini SpA for €55 million ($64.7 million or Rs 440 crore), as part of its overseas expansion plans. The businesses were bought on a cash- and debt-free basis from Cevitaly Srl, a wholly-owned unit of Algeria’s Cevital SpA.

Cevitaly, part of Algerian billionaire Issad Rebrab-led Cevital, had acquired the three companies from Italian steelmaker Lucchini in 2014.

All the companies are located at Piombino in Italy’s Tuscany province. The acquisition was to expand JSW Steel’s presence in Italy and provide specialty steel long-products to the European market.

The sale of the businesses is expected to bring in “some loss, but not a big deal,” JSW Group chairman and managing director Sajjan Jindal said in an interview to The Financial Times. He, however, did not divulge further details.

Aferpi produces special long steel products including rails, wire rods and bars, with an annual capacity of rail mill at 0.32 million tonne, bar mill at 0.4 million tonne and of wire rods at 0.6 million tonne. Piombino Logistics, which manages the logistics infrastructure of Piombino’s port area, also operates a 42 km rail line inside the plant. GSI Lucchini manufactures forged steel balls used in grinding mills.

“The group had made huge investments to revive the company, but did not succeed. Further, the ongoing Russia-Ukraine crisis had added to the company’s woes,” they added.

India’s largest private sector steel manufacturer, JSW Steel, had always bet on acquisitions for growth. These include its buy of bankrupt Bhushan Power & Steel for ₹19,300 crore, steel plate and pipe business of Welspun Corp for ₹86 crore last year. The company had also acquired Vardhman Industries for ₹69 crore through Insolvency and Bankruptcy Code in 2019, and Monnet Ispat and Asian Colour Coated later in 2020.