CI VIEW: Tunisia’s ElFouladh steel group M&A target for Tenaris, Danieli, Macegaglia, Bizerte MP UPDATE

WASHINGTON/BIZERTE (CI MENA) – (Updating on May 18 to add interview with The Abrraj Group Managing Partner Sev Vettivetpillai ) The Tunisian state-owned Societe Tunisiene de Siderugie ElFouladh steel group is a perfect takeover target for specialty steel groups such as Italian-Brazilian giant Tenaris (NYSE: TS); Milan-based Danieli (BIT:DAN); and the Mantova-based Marcegaglia Group, Tunisian Member of Parliament and the highest elected official of Bizerte Ali Belakhoua said.

[Tenaris Chairman and CEO Paolo Rocca speaks to Capitol Intelligence/BBN using CI Glass at SelectUSA Investment Summit in Washington, DC. June 20, 2016]

In an interview with Capitol Intelligence/CI MENA during the IMF World Bank Spring Meetings, Belakhoua said the Bizerte-based steel plant can be transformed into a specialty oil services steel company serving the needs Tunisian-based oil operators such as oil giants such as Italy’s ENI (NYSE:E) and Royal Dutch Shell (NYSE:RDS.A) and smaller players such as Woodlands, Texas-based Andarko Petroleum Corporation (NYSE: APC) and Austria’s OMV Group.

Ali Belakhoua is also a member of the Natural Resources Committee of the Tunisian Parliament.

[Tunisian Member of Parliament Ali Belakhoua (Bizerte) speaks to Capitol Intelligence using CI Glass on interest from Italian specialty steel groups Danieli, Marcegaglia and Tenaris for Tunisian steel company El Fouladh in Bizerte, Tunisia. IMF World Bank Spring Meetings in Washington, DC. April 21, 2017]

Belakhoua said he spoke in parliament in opposition to the sale of ElFouladh because the consortium was only interested in the defunct steel plant’s USD 50m in scrap metal.  He said he would support any bidder willing to take over ElFouladh from the Tunisian government and relaunch the company as a specialty steel business.

The Tunisian-American MP said there has been informal contacts from agents and local bankers on a possible bid from Tenaris, Danieli and Marcegaglia but none of the companies have made a formal offer for the steel plant with Tunisian Trade and Industry Minister Zeid Ladhari.

[Tunisian Commerce Minister Zied Ladhari speaks to Capitol Intelligence/CI MENA using CI Glass on the impact that President- elect Donald Trump will have on Tunisia after the defeat of former Secretary of State Hillary Clinton at Tunisia 2020 Investment Summit in Tunis. November 30, 2016.]

Tenaris. the NYSE and Milan stock exchange listed group, is an ideal candidate to take over ElFouladh as it can easily receive an estimated USD 250-300m in project financing and loan guarantees from the World Bank’s IFC, the European Bank for Reconstruction and Development (EBRD) , the US government’s  Overseas Private Investment Corporation (OPIC) and the African Development Bank. Tenaris is completing a USD 1.8 bn pipe plant this year near Houston, Texas.

The family-controlled Danieli is also an ideal candidate as it operates in the specialty steel business and is a leader in turnkey projects. Danieli also has operations in Cranberry Township, PA.

ENI Chairman Emma Marcegaglia speaks with Capitol Intelligence/CI MENA using Google Glass at Bertlesmann Foundation forum Shifting Gears: Merging Growth and Prosperity at US Chamber of Commerce in Washington, DC. April 16, 2015.]

Marcegaglia, the family-owned steel specialty steel group based in Mantova, Italy – is another good candidate for the Bizerte steel plant considering it is an industry leader in the renewable energy sector in which Tunisia is the global leader for sustainable innovation and development. Emma Marcegaglia —  a part owner of Marcegaglia — is currently the Chairman of Italy’s ENI oil and gas giant.

Marcegaglia has manufacturing operations in Munhall, PA.

Boston, Massachusetts-based GE (NYSE:E), which generates about USD 2bn in revenues in Tunisia, could eye El Fouladh steel group for its recently acquired oil services company Baker Hughes.

[GE Vice Chairman John G. Rice filmed by Capitol Intelligence/CI MENA using CI Glass answering question on GE opening its M&A network to US SMEs at IMF World Bank Spring Meetings in Washington, DC.]

Baker Hughes or its third party suppliers could use El Fouladh to supply oil service equipment to Shell, Anadarko, ENI and OMV that use Tunisia as its base also for operations in Libya and Algeria.

GE Vice Chairman John G. Rice told Capitol Intelligence/CI MENA that GE is willing to allow its unbeatable infrastructure of bankers, lawyers and project financing experts to help US small to medium enterprises access early growth markets such as Tunisia.

GE also has recently formed a USD 1bn African Infrastructure fund with Dubai-based Atlas Mara founded by Ashish Thakkar and managed by former Barclays Bank CEO Bob Diamond. 

Tunisia, notwithstanding the headlines and the government ineptitude, is rapidly becoming the leading early growth markets in the world thanks to its access to major European markets of Italy, Germany and France and its role as the gateway to North Africa/West Africa (NAWA) market of 350m.

At the recent IFC EMPEA Global Private Equity Conference in Washington DC, the Dubai-based The Abraaj Group Managing Partner Sev Vettivetpillai spoke exclusively to Capitol Intelligence Group/CI MENA on the out performance the fund is seeing from its Tunisian investments.      

[The Abraaj Group Managing Partner Sev Vettivetpillai speaking Capitol Intelligence/CI MENA using CI Glass at IFC EMPEA Global Private Equity Conference in Washington, DC. May 16. 2017] 

The Bizerte member of Parliament Ali Belakhoua said he is available to help any bidder and their financial advisers willing to relaunch ElFouladh with aim of preserving and creating new jobs for the citizens around the globally strategic Port of Bizerte.

By PK Semler in Washington, DC and Bizerte, Tunisia.  For information please call +1-202-549-3399 or email pks@capitolintelgroup.com

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