Italian authorities consider different options for Acciaierie d’Italia

The Italian government is considering different options to guarantee the business continuity of Acciaierie d’Italia (ADI), formerly known as Ilva. Authorities are preparing for a meeting with the private partner, ArcelorMittal, on 8 January.

The outcome of this meeting however is not expected to resolve the current issue. A source close to the dossier says the government is considering the best way to “divorce” from the private partner. According to rumours unsubstantiated by the company, ArcelorMittal, the current majority shareholder, is willing to pay its share of the additional €320 million ($352m) capital increase to sort out the company’s immediate needs.

However, the government and the private partner are clashing on the significant funds – over €1 billion – needed to release the steelmaker’s assets. These were seized previously by the extraordinary administrator of the former Ilva plant due to legal conundrums.

The lease of Taranto’s equipment from the administrator is set to expire on 31 May, which is when the equipment should be purchased, the source explains. The original expiration date in May 2022 was already postponed to this year. Given all the legal issues and bureaucracy, ArcelorMittal is said not to be willing to pay to purchase the equipment.

“The government is realising ArcelorMittal will not invest and that a consensual divorce is the best way to separate. The €320 million is nothing compared to what the steelmaker needs. On 10 January, Taranto’s latest gas bill will be due but there are also many suppliers and shipping companies in need of payment, as well as vessels at the port that cannot unload material,” the source comments.

Acciaierie d’Italia may see its gas supply cut if the bill remains unpaid. For a future commercial procurement contract, gas operators are asking for a downpayment of about €100m because they know ADI may not be able to pay, but ADI needs financing for the downpayment.

At the coming meeting with ArcelorMittal, the government intends to request “precise guarantees on investments, production levels, worker safety, plant and environmental protection”, says a note from the presidency of the Council of Ministers. The unions will be called again after the meeting.

Last week, authorities met unions in Rome, in what was “yet another negative meeting at Palazzo Chigi”, Uilm secretary general Rocco Palombella says in a note obtained by Kallanish.

“The government remains the only believer in Italy in a future for the former Ilva linked to ArcelorMittal … The environmental plan has not yet been completed, there are safety problems due to the lack of maintenance … There is no condition to continue having the former Ilva managed by ArcelorMittal …Without a change in governance, there cannot be a future for the former Ilva, for environmental recovery, for employment protection and production continuity,” Palombella adds.

Invitalia is expected to become majority shareholder in 2024, while ArcelorMittal will retain a 40% shareholding. In 2021, ArcelorMittal deconsolidated the assets and liabilities, including the remaining lease and purchase liability, of Acciaierie d’Italia Holding, formerly AM InvestCo Italy. On the other hand, Invitalia and the Italian government have been slow in making decisions and in paying out funding. Meanwhile, production at Taranto continues to be slow (see Kallanish passim).

ArcelorMittal declined to comment.

Natalia Capra France