According to the AFP news service, the action comes as Acciaierie d’Italia SpA (ADI) is on the brink, more than EUR3 billion in debt and unable to pay suppliers. 

“Under the terms of emergency administration, the government will appoint administrators to prepare a restructuring, while seeking new investors, sources close to the matter had previously said,” the news service reported. 

In a statement, ArcelorMittal said the action ends its involvement in ADI, into which it has already invested EUR2 billion.

“This very significant investment enabled ADI to complete an extensive EUR800 million environmental program on time that ensured compliance with the Integrated Environmental Authorization set out by the Italian government, as well as invest EUR1.2 billion in upgrading equipment at all sites. ADI also benefited from hundreds of millions of euros of credit through the provision of raw materials by ArcelorMittal,” the steelmaker said. 

ArcelorMittal said it had worked diligently to address what it called a significant discrepancy in capital investment between itself and Italian state investment agency Invitalia. Invitalia owns 38% of the business, and ArcelorMittal owns 62%

“In recent discussions ArcelorMittal put forward pragmatic proposals to address this while continuing the public-private partnership with Invitalia that was established in April 2021. 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." ArcelorMittal said.  

“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,” it added.