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Steel

ArcelorMittal says Italy broke deal in plant administration move

Rome argues that Acciaierie d’Italia is vital national asset, placing it under special state powers

A general view of the ArcelorMittal Italia steel plant (ex Ilva) seen past the Tamburi residential district in Taranto, southern Italy, November 8, 2019. © Photo credit: AFP

ArcelorMittal SA is protesting an Italian government move to put the country’s biggest steel mill under special administration, marking a possible breach of agreement.

Luxembourg-based ArcelorMittal was not informed of a decision by state investment unit Invitalia to file a request for special administration, according to a letter from the steelmaker seen by Bloomberg News.

The company has in recent weeks engaged with the government in a bid to reach an agreement for an orderly exit from the Acciaierie d’Italia SpA plant, formerly known as Ilva, the letter says.

ArcelorMittal declined to comment. A representative for Acciaierie d’Italia also declined to comment.

The letter underscores a simmering dispute between Prime Minister Giorgia Meloni’s government and the multinational, which owns 62% of the Italian plant. Invitalia holds the remainder.

Rome has argued that Acciaierie d’Italia is a vital national asset, which puts the plant under the purview of state powers to override private investors and place companies under special administration.

This type of insolvency, generally applied to large entities subject to some degree of government oversight, allows businesses to stay afloat and continue paying workers during the administration process.

Meloni’s government, in place for less than a year, has already made a name for itself with an unusually active approach to corporate affairs. It’s taken a leading role in deals to buy Telecom Italia SpA’s network and to sell off a stake in ITA Airways, and in attempts to restrict the role of Chinese owners at tiremaker Pirelli SpA.

In its letter to the government, ArcelorMittal noted that Invitalia filed a request with the state late Sunday to start the administration procedure.

The letter comes ahead of a meeting between government officials and union representatives scheduled for Monday evening.

Source: Bloomberg