Italy takes over running of ArcelorMittal's steelworks
Business
Italy takes over running of ArcelorMittal's steelworks
ROME (Reuters) - Italy's industry ministry on Tuesday took charge of ArcelorMittal's (MT.LU) plants in the country under a special administration procedure, ending weeks of clashes with the world's second-largest steelmaker.
The process is similar to Chapter 11 bankruptcy in the US, allowing a business or individual to reorganize its debts and obligations.
It also helps the government buy time while looking for new industrial partners for Acciaierie d'Italia (ADI) -- the Italian steel business.
ArcelorMittal said Rome's decision ended its involvement in ADI, and its statement did not mention any plan to take legal action to fight it.
Weighed down by an increase in energy prices and a drop in rolled steel coil prices, ADI has run out of cash and has accumulated huge debts with suppliers including energy giant Eni (ENI.MI) and grid operator Snam (SRG.MI).
ADI was formerly known as Ilva, whose main plant in the southern city of Taranto is one of the largest in Europe and is a major employer in Italy's underdeveloped south.
ArcelorMittal took control of Ilva in 2018, becoming its top shareholder with 62% and leaving the remaining 38% to state investment agency Invitalia.
The group noted that it had invested over 2 billion euros ($2.2 billion) in ADI, while it said the Italian government delivered "less than one-third" of the 2 billion euros it had promised for the troubled steelworks.
Ukraine's Metinvest could be among those interested in investing in ADI, its CEO was quoted as saying last month.
Italian Prime Minister Giorgia Meloni's government has said it plans to provide instant liquidity to ADI through an up to five-year loan worth 320 million euros.
Special Commissioner Giancarlo Quaranta will now run ADI, a ministry statement said.
Quaranta has long experience of working at the Taranto steelworks, starting in 1984, according to his LinkedIn profile.
He was a manager for Ilva's former owners, the Riva family, and also worked at the plant under a previous government-appointed special administration adopted in 2015.
