A source told Moscow Kommersant Daily confirming a report in the Italian press that Severstal may sell its Italian Lucchini mills to its own majority owner Mr Alexei Mordashov.

In an article in Tuesday edition, Kommersant said a source close to Severstal added the move is a possible interim solution while the company decides what to do with the loss making business. The source said "Theoretically and legally it is a possibility."

Severstal declined to comment.

The company earlier confirmed that it is pursuing several possible options for Lucchini including a possible sale to a strategic partner.

Analysts noted that a sale to Mr Mordashov would allow Severstal to remove the loss making Lucchini and its USD 1.4 billion of debt from the company balance sheet.

They also previously noted that selling Lucchini could prove challenging since its debt burden exceeds its estimated enterprise value of about USD 1 billion.

(Sourced from Kommersant daily)