The European Commission approved a rescue loan of up to EUR390 million to flat steel producer Acciaierie d’Italia (ADI) under EU state aid rules, the Commission said on 10 February.
The funds were allocated to ensure that the steelmaker can cover operating costs until the new owner is selected in the ongoing tender.
“Italy expects to complete the sale process soon and transfer the operation to the selected bidder. Until then, ADI faces serious liquidity needs to cover operating costs such as paying suppliers and wages. The rescue loan authorised by the Commission aims to cover these operating costs for the months ahead,” the Commission said.
Late last year Flacks Group, a United States-based investment firm focused on the turnaround of distressed businesses, emerged as the preferred bidder for ADI. The company plans to double steel output at ADI to 4 mt within one year. As part of its decarbonisation initiative Flacks Group plans to replace existing blast furnaces (BFs) with two electric-arc furnaces (EAFs) and keep only one BF running.
ADI has annual production capacity capped at 6 mt of crude steel. But it currently operates only BF No. 4.
The steelmaker plans to restart BF No. 2 around 20 February, according to Italian press reports. ADI did not reply to McCloskey’s request for confirmation of this information.
Earlier this year, the extraordinary administration of ADI sued ArcelorMittal seeking approximately EUR7bn in damages alleging that ArcelorMittal mismanaged the assets when it was in control. ArcelorMittal categorically rejected all allegations.
