Acciaierie d'Italia to be placed in 'extraordinary administration'

Acciaierie d'Italia operates sites and structures occupying a total area of more than 17 million square metres. The company employs more than 10,000 people. The Taranto-based plant is Italy's only full-cycle facility and is equipped with 200km of tracks for railway transport, 50km of roads and 90km of conveyors for the movement of raw materials which arrive at the Port of Taranto and transported from there to the company's other sites in Genoa, Novi Ligure, Racconigi, Legnago and Paderno Dugnano.

ArcelorMittal has been involved with the Italian steelmaker since 2018 and, it claims, has been fully committed to the people and the assets of ADI – previously known as Ilva. ArcelorMittal has invested over 2 billion Euros, enabling the Italian company to invest in an extensive €800 million environmental programme and a further €1.2 billion on upgrading equipment.

ArcelorMittal further claims that it was keen to address 'the significant discrepancy' in capital investment into ADI by the two shareholders – the other one being Invitalia, an organisation that supports government bodies in the development and implementation of EU programmes through extensive and integrated technical support services; it operates as a partner of the Directorates of the Ministry of Enterprises and Made in Italy as well as other institutions.

The public/private partnership between Invitalia and ArcelorMittal was established in April 2021.

"In recent discussions ArcelorMittal put forward pragmatic proposals to address this while continuing the public-private partnership with Invitalia. When we were not able to agree on acceptable terms, we also offered to sell our shareholding in ADI to Invitalia. The discussions, despite ArcelorMittal’s best efforts, were not successful."

According to ArcelorMittal, the current situation could have been avoided. "Had ADI been able after April 2021 to access traditional debt financing and been able to raise the working capital required to fund its ongoing needs, rather than relying on equity injections from its shareholders as its sole source of capital, this situation could have been avoided," said the company in a press announcement.

The press release continues, "Unfortunately, the conditions precedent to allow ADI to convert its lease of the assets into a formal purchase – conditions that ADI has no control over, were originally set to be completed before May 2022, and subsequently extended to May 2024 – remain unmet today. ADI’s financial situation has been further impacted by the Italian Government delivering less than one-third of the €2 billion of support measures it offered to at the time the public-private partnership with Invitalia was established."

ArcelorMittal added that 'an already complicated turnaround was made even more challenging by the instability caused by the temporary removal of criminal immunity applicable during the implementation period of the environmental investment programme, the demand environment during the Covid crisis and the energy crisis in Europe last year."

At the heart of situations like this are, of course, ordinary people, a fact recognised by ArcelorMittal. "For the people and communities of ADI, ArcelorMittal hopes that a future can be secured that will bring much needed stability."