The Italian government has approved a new €100 million ($116.35m) loan to Acciaierie d’Italia (ADI) as part of the recent decree on fuel excise duties approved by the Council of Ministers last week.
This is the second tranche of a total €240m loan package, with a further €140m expected to be approved in July. The funds are provided “to meet the urgent and unavoidable need to preserve the operational continuity of the steelmaking equipment … pending the completion of the ongoing sale procedure,” the decree reviewed by Kallanish states.
The new funding will exhaust the maximum ceiling of €390m in aid authorised by the European Commission earlier this year. A source close to the company confirms the loan is limited to covering operational expenses and has to be repaid within six months. The financing will be used to cover liquidity for works, suppliers and salaries.
Meanwhile, the sale process for ADI’s assets is dragging on, with negotiations said to be stalling with the two international bidders, Flacks Group and Jindal Steel International. An informed source says Jindal’s requests are deemed unacceptable, while Flacks has asked the Italian government for a €500m bridge loan to support the site’s relaunch.
Earlier this year, the Italian government approved a €149m loan for ADI to sustain operations at the Taranto steelworks. The loan, published in the Official Gazette, was granted to prevent the immediate and irreversible shutdown of the blast furnaces, protect workers and preserve the ongoing sale negotiations with the bidders (see Kallanish passim).
