ArcelorMittal has told the Italian authorities that it will terminate the lease and the subsequent purchase of the Italian integrated steelmaker formerly known as Ilva, Kallanish learns from the company.
As per the agreement signed at the end of October 2018, the company has the right to withdraw from the contract. This will effectively return the company into the hands of the administrators in 30 days.
“The agreement stipulates that, in the event that a new law affects the environmental plan for the Taranto plant so as to materially impair the ability to operate it or to implement its industrial plan, the company has a contractual right to withdraw from the agreement. Effective on 3 November 2019, the Italian Parliament has removed the legal protection necessary for the Company to implement its environmental plan without the risk of criminal liability, thus justifying the withdrawal notice,” ArcelorMittal explains in the note.
In addition to the above, the company believes ongoing legal issues may possibly force the Taranto site to close blast furnace number 2. This would make it impossible for the company to implement its industrial plan, it says.
A senior market observer comments that the announcement was not unexpected. “We were starting to expect this turn of events since before the summer,” he comments. “I think ArcelorMittal tried hard, but the situation is very complicated. I am not sure how the Italian authorities will manage the issue, but at the moment it is difficult to see other operators interested in taking control of the company amidst such uncertainty.”
