The final closing by ArcelorMittal of the lease and purchase agreement for the steelmaker formerly known as Ilva is now scheduled by May 2022, subject to various conditions, ArcelorMittal says in a note seen by Kallanish.
On 4 March ArcelorMittal announced that AM InvestCo and the Ilva Commissioners had signed an amendment agreement to the original lease and purchase agreement for Ilva. The amendment outlines the terms for a significant equity investment by Italian state-sponsored entities into AM InvestCo. This forms the basis of a new partnership between ArcelorMittal and the Italian government.
This equity investment, to be captured in an investment agreement, is to be executed by 30 November. The amendment agreement is structured around a new industrial plan for Ilva, which involves investment in lower carbon steelmaking technologies. The Italian government has recently designated Invitalia to negotiate with AM InvestCo. In the event that the investment agreement is not executed by end-November, AM InvestCo has a withdrawal right, subject to an agreed payment, the company says.
Meanwhile, ArcelorMittal Italia is committing to settling all outstanding debts, which is improving negotiations with the government. Due to the current pandemic crisis and the fall in global steel demand the company is producing at minimum capacity. Some sources believe it will end the year with a production of approximately 3 million tonnes.
It is also extending temporary layoffs for a further 13 weeks starting from 16 November at its Taranto steelworks. The new furloughs affect 8,140 employees including production workers, office workers and managers at the company’s main steelworks in Taranto (see Kallanish 23 October).