ArcelorMittal, the world’s biggest steelmaker, has signed a binding investment agreement with Invitalia, an Italian state-owned company, forming a public-private partnership between the parties. The investment agreement will result in a recapitalization of AM InvestCo, ArcelorMittal’s subsidiary that signed the lease and obligation to purchase agreement for Ilva’s business.
Invitalia will invest in AM InvestCo in two tranches. The first investment of €400 million will be made by 31 January 2021 (subject to EU antitrust authorization), providing Invitalia with joint control over AM InvestCo. The second tranche of up to €680 million is payable on the closing of AM InvestCo’s purchase of Ilva’s business, which is subject to the satisfaction of various conditions precedent* by May 2022, at which point Invitalia’s shareholding in AM InvestCo would reach 60%.
The conditions precedent to closing include: the amendment of the existing environmental plan to account for changes in the new industrial plan; the lifting of all criminal seizures on the Taranto plant; and the absence of restrictive measures – in the context of criminal proceedings where Ilva is a defendant – being imposed against AM InvestCo.
ArcelorMittal will also invest up to €70 million, to the extent necessary to retain a 40% shareholding and joint control over the company.
The updated industrial plan agreed between AM InvestCo and Invitalia involves investment in lower-carbon steelmaking technologies, including the construction of a 2.5Mt Electric Arc Furnace. The industrial plan, which targets reaching 8Mt million tonnes of production in 2025, involves a series of public support measures including ongoing government-funded employment support.
AM InvestCo’s governance would be based on the principle of joint control starting from Invitalia’s first investment.