ArcelorMittal, the world¡¯s biggest steelmaker, has signed a binding investment agreement with Invitalia, an Italian state-owned company, forming a public-private partnership between the parties. The investment agreement will result in a recapitalization of AM InvestCo, ArcelorMittal¡¯s 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 will be made by 31 January 2021 (subject to EU antitrust authorization), providing Invitalia with joint control over AM InvestCo. The second tranche of up to €680 million is payable on the closing of AM InvestCo¡¯s purchase of Ilva¡¯s business, which is subject to the satisfaction of various conditions precedent* by May 2022, at which point Invitalia¡¯s shareholding in AM InvestCo would reach 60%.
The conditions precedent to closing include: the amendment of the existing environmental plan to account for changes in the new industrial plan; the lifting of all criminal seizures on the Taranto plant; and the absence of restrictive measures ¨C in the context of criminal proceedings where Ilva is a defendant ¨C being imposed against AM InvestCo.
ArcelorMittal will also invest up to €70 million, to the extent necessary to retain a 40% shareholding and joint control over the company.
The updated industrial plan agreed between AM InvestCo and Invitalia involves investment in lower-carbon steelmaking technologies, including the construction of a 2.5Mt Electric Arc Furnace. The industrial plan, which targets reaching 8Mt million tonnes of production in 2025, involves a series of public support measures including ongoing government-funded employment support.
AM InvestCo¡¯s governance would be based on the principle of joint control starting from Invitalia¡¯s first investment.
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