The Italian government told trade unions at a meeting on Thursday that it would place the former Ilba steel company under special administration to ensure its survival.
The move follows weeks of conflict between Prime Minister Giorgia Meloni’s government and ArcelorMittal, the main shareholder of Acciaieri d’Italia (ADI), as Mr. Ilva is now known.
ArcelorMittal owns 62% of the group, with state-owned investment company Invitalia owning the remaining 38%, but could not immediately be reached for comment. Legal appeals against the Rome decision could be launched once the Rome decision takes effect. Michele de Palma, head of FIOM’s main metalworkers’ union, said it would take about two weeks for the government to appoint one or more commissioners.
Meanwhile, ArcelorMittal has started proceedings for an extrajudicial agreement, which government officials say is a waste of time, it added.
Similar to Chapter 11 bankruptcy in the United States, this special administration allows ADI to restructure its debt and obligations while the government searches for a new industrial partner. Roma aims to provide liquidity to ADI through a loan worth 320 million euros ($347.65 million) for up to five years.
Weighed down by rising energy prices and falling prices for rolled steel coils, ADI has run out of cash and is in huge debt with suppliers including energy giant Eni.
ADI’s main factory in the southern Italian city of Taranto is one of the largest in Europe and a major employer in the underdeveloped region of southern Italy.
Join our Whatsapp channel for the latest global news updates
Published date: January 18, 2024 23:26:31 IST