ArcelorMittal Italian partnership back on track

Luxembourg-based ArcelorMittal says it has signed a binding agreement with Invitalia, an Italian state-owned company, to form a public-private partnership that will enable Arcelor Mittal to invest in the Ilva steelmaking complex in Taranto, Italy.

The signed investment agreement will result in a recapitalization of AM InvestCo, an ArcelorMittal 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 euros ($485 million) will be made by Jan. 31, 2021 (subject to EU antitrust authorization), providing Invitalia with joint control over AM InvestCo.

The second tranche of up to 680 million euros ($825 million) is payable on closing of AM InvestCo’s purchase of Ilva’s business, which is subject to legal and regulatory conditions to be met by May 2022, at which point Invitalia’s shareholding in AM InvestCo would reach 60 percent. ArcelorMittal will also invest up to 70 million euros ($85 million), to the extent necessary to retain a 40 percent shareholding and joint control over the company, the steelmaker says.

The updated industrial plan agreed to between AM InvestCo and Invitalia involves investment in what ArcelorMittal calls lower-carbon steelmaking technologies, including the construction of a 2.5 million-tons-per-year electric arc furnace (EAF) likely to consume ferrous scrap.

“The industrial plan, which targets reaching 8 million metric tons of production in 2025, involves a series of public support measures including ongoing government-funded employment support,” says ArcelorMittal. The steelmaker says AM InvestCo’s governance would be based on the principle of joint control starting from Invitalia’s first investment.