Milan tribunal rejects ArcelorMittal's ADI administration block appeal
The Milan tribunal has rejected ArcelorMittal’s appeal to block its state-owned joint venture partner in Acciaierie d'Italia (ADI), Ivitalia, from requesting the commencement of a special administration for the steelmaker, Kallanish reads in the tribunal document.
Last week, ArcelorMittal submitted an appeal which revealed that ADI had accumulated debt of €3.1 billion ($3.3 billion) as at 30 November 2023. According to the steelmaking group, the government is responsible for ADI’s crisis. Its troubled financial situation “has not allowed for an appropriate working capital financing scheme, for which negotiations with major European financial institutions were underway in autumn 2023 but suffered a setback due to several institutions’ announcements to place the company into special administration,” the steelmaker stated in its appeal (see Kallanish 2 February).
The Milan tribunal rejection means another special administration is now a strong possibility. At present, ArcelorMittal owns 62% of ADI with Invitalia owning 38%. Sources close to the matter say the government is in talks with local but also foreign steel companies to replace ArcelorMittal, including one global steelmaker.
Metinvest has said it may consider in future the possibility of becoming a shareholder. However, “there are many problems and I do not think that one investor can singlehandedly resolve them all … If the government wants to involve other players, we will carefully consider it. And if we can help, we will,” Metinvest chief executive Yuriy Ryzhenkov said in a recent interview with Italian broadsheet Corriere della Sera. Sources speculate that a consortium of investors will not be able to handle the steelmaker owing to its several issues and the different needs and interests of each shareholder.
Trade unions have warned several times that the hot-end area is being idled and have lamented the lack of safety at the Taranto steelworks. Consequently, the former Ilva commissioners that own the Taranto equipment will inspect the steelworks on 2 February. ADI is rumoured to be idling blast furnace no.2 at Taranto and is producing using only BF No.4. ADI’s output in 2023 was considerably below 3 million tonnes. This is below the shareholders’ initial objective of 4mt in 2023 and 5mt in 2024 (see Kallanish passim).
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Anonymous
Very good overview of the weekly steel market.
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