ArcelorMittal objects Invitalia’s move to place Acciaierie d’Italia under special administration

ArcelorMittal, the largest European steelmaker, objected Invitalia’s move to put Acciaierie d’Italia (ADI) under special administration, calling it “a breach of agreement.”

ArcelorMittal owns 62% of ADI — formerly called Ilva — with the remaining 38% owned by government investment agency Invitalia. The company, once the country’s biggest steel mill, was put under special administration in 2015 and ArcelorMittal bought it in 2018 for Eur1.8 billion.

ADI has been at the center of multiple legal and political disputes with ArcelorMittal and the Italian government over investments and ownership.

According to a letter dated Feb. 18 and seen by S&P Global Commodity Insights, ArcelorMittal was not informed of Invitalia’s decision to file a request for special administration.

“We were surprised and disappointed to read in the Italian media tonight that Invitalia requested the Government of Italy to commence the process to place ADI into extraordinary administration,” ArcelorMittal wrote. “This is an egregious breach of the Investment Agreement,” the company added.

As underscored in the letter of the Luxembourg holding “intensive discussion took place between the government and the steelmaker to find an agreement to provide support to ADI or for our orderly exit.”

ArcelorMittal declined to comment while Invitalia did not answer when contacted by S&P.

ADI has been facing financial concerns, with production at the company’s mill in Taranto reaching its lowest ever level of around 3 million mt of crude steel in 2023, well below its breakeven point estimated at 6 million mt.

Unions and government representatives are due to meet late on Feb. 19 to discuss the latest developments.

Author Annalisa