In a recent development, ArcelorMittal, the major stakeholder in Acciaierie d’Italia (ADI) steelworks, has expressed its willingness to address the challenges surrounding the struggling mill. Aditya Mittal, the CEO of ArcelorMittal, conveyed the company’s stance in a letter to Italian Prime Minister Giorgia Meloni.
The move comes amidst signals from the Italian government indicating its intention to place the steel mill under special administration. In response, Mittal proposed two potential solutions – selling the entire stake to Invitalia for a fraction of its cash investment or remaining as a minority strategic partner. Despite initial refusal from Invitalia, Mittal emphasized that the offer is still on the table.
ArcelorMittal’s commitment to finding an ‘amicable solution’ is reflected in its openness to various scenarios. The company is willing to sell its stake to Invitalia or continue as a minority strategic partner, providing technical and industrial expertise in collaboration with the Italian government.
The steel giant has been facing financial challenges, evident in the record-low production of approximately 3 million metric tons of crude steel in 2023 at the Taranto mill – well below the estimated breakeven point of 6 million metric tons. With only two blast furnaces in operation, urgency surrounds the need to find a resolution to stabilize the steelworks.
While Mittal’s offer seems to have temporarily averted legal conflicts between ArcelorMittal and the Italian government, uncertainties loom over whether Invitalia will accept the majority stake or if the government will opt for special administration while seeking a new private investor.
In response to the financial strain, the Italian government has proposed a bridge loan of Euro 320 million. The emphasis is on achieving a timely resolution within the next two weeks to address critical financial obligations, including supplier payments, raw materials, and utility bills. Currently, ArcelorMittal holds a 62% stake in Austempered ductile iron (ADI), while Invitalia owns the remaining 38%.
It’s worth noting that ArcelorMittal acquired ADI in 2018, following the steelworks’ special administration in 2015. As stakeholders weigh the options on the table, the fate of Acciaierie d’Italia remains uncertain, pending decisions from both Invitalia and the Italian government in the coming weeks.
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