ROME (Reuters) -Italy will put the former Ilva steel company under special administration to keep it afloat, the government told trade unions in a meeting on Thursday.
The move follows weeks of clashes between Prime Minister Giorgia Meloni’s administration and ArcelorMittal, the main shareholder in Acciaierie d’Italia (ADI), as Ilva is now known.
ArcelorMittal, which owns 62% of the group while state-owned investment agency Invitalia has the remaining 38%, could potentially launch a legal appeal against Rome’s decision once it is effective.
ArcelorMittal was not immediately available for comment.
The special administration, similar to Chapter 11 bankruptcy in the United States, allows a business or individual to reorganize debts and obligations.
The move will help the government buy time while looking for a new industrial partner for ADI.
Weighed down by an increase in energy prices and a drop in rolled steel coil prices, ADI has run out of cash and has accumulated huge debts with suppliers including energy giant Eni.
ADI’s main plant in the southern Italian city of Taranto is one of the largest in Europe, and is a major employer in Italy’s under-developed south.
(Reporting by Giuseppe FonteEditing by Gianluca Semeraro and Mark Potter)