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ArcelorMittal (MT) Rejects Italy Government's Stake Plan in ADI
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ArcelorMittal (MT - Free Report) rejected the Italian government’s proposal to acquire a controlling stake in Acciaierie d'Italia (“ADI”), a major steel plant in Europe formerly known as Ilva, according to a statement from the cabinet, as reported by Reuters yesterday.
A confidential source informed Reuters that placing the financially struggling site under special administration might be the only viable option to prevent its closure. ArcelorMittal currently holds a 62% stake in ADI, while the remaining 38% is owned by the state-owned investment agency Invitalia.
The government's statement outlined Invitalia's willingness to inject around 320 million euros ($351.1 million) into ADI, intending to increase its ownership to 66%. However, ArcelorMittal declined to provide assurances regarding additional investments required by ADI.
The statement highlighted ArcelorMittal's reluctance to commit financially and make investment pledges, even as a minority shareholder. The announcement followed a meeting in Rome between Italian government officials, including cabinet undersecretary Alfredo Mantovano and economy minister Giancarlo Giorgetti and ArcelorMittal CEO Aditya Mittal.
The financial challenges faced by the steel plant, coupled with rising energy prices and a decline in rolled steel coil prices, have led to a cash shortage and substantial debt, mainly to suppliers like energy giant Eni.
The ex-Ilva steel works, located in the southern city of Taranto, employs approximately 10,000 people directly, with an additional 6,000 working in related industries. Recent months have seen production reductions, partial shutdowns and numerous workers placed on furlough.
The ex-Ilva plant posed challenges for successive Italian governments due to allegations of highly toxic emissions. However, it also serves as an economic lifeline for a region characterized by high unemployment and economic depression.
Shares of ArcelorMittal have lost 5.9% in the past year compared with a 17.7% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
ArcelorMittal currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for LEU’s current-year earnings has been revised upward by 30.5% in the past 60 days. LEU beat the Zacks Consensus Estimate in each of the last four quarters, the average earnings surprise being 47.7%. The company’s shares have increased 35.1% in the past year.
The consensus estimate for Alamos’ current fiscal year earnings is pegged at 53 cents, indicating a year-over-year surge of 89.3%. AGI beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 25.6%. The company’s shares have rallied 17.8% in the past year.
The Zacks Consensus Estimate for CBT’s current-year earnings has been revised upward by 4.4% in the past 60 days. CBT beat the Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 2.3%, on average. The stock has rallied around 9.5% in a year.
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ArcelorMittal (MT) Rejects Italy Government's Stake Plan in ADI
ArcelorMittal (MT - Free Report) rejected the Italian government’s proposal to acquire a controlling stake in Acciaierie d'Italia (“ADI”), a major steel plant in Europe formerly known as Ilva, according to a statement from the cabinet, as reported by Reuters yesterday.
A confidential source informed Reuters that placing the financially struggling site under special administration might be the only viable option to prevent its closure. ArcelorMittal currently holds a 62% stake in ADI, while the remaining 38% is owned by the state-owned investment agency Invitalia.
The government's statement outlined Invitalia's willingness to inject around 320 million euros ($351.1 million) into ADI, intending to increase its ownership to 66%. However, ArcelorMittal declined to provide assurances regarding additional investments required by ADI.
The statement highlighted ArcelorMittal's reluctance to commit financially and make investment pledges, even as a minority shareholder. The announcement followed a meeting in Rome between Italian government officials, including cabinet undersecretary Alfredo Mantovano and economy minister Giancarlo Giorgetti and ArcelorMittal CEO Aditya Mittal.
The financial challenges faced by the steel plant, coupled with rising energy prices and a decline in rolled steel coil prices, have led to a cash shortage and substantial debt, mainly to suppliers like energy giant Eni.
ArcelorMittal Price and Consensus
ArcelorMittal price-consensus-chart | ArcelorMittal Quote
The ex-Ilva steel works, located in the southern city of Taranto, employs approximately 10,000 people directly, with an additional 6,000 working in related industries. Recent months have seen production reductions, partial shutdowns and numerous workers placed on furlough.
The ex-Ilva plant posed challenges for successive Italian governments due to allegations of highly toxic emissions. However, it also serves as an economic lifeline for a region characterized by high unemployment and economic depression.
Shares of ArcelorMittal have lost 5.9% in the past year compared with a 17.7% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
ArcelorMittal currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Centrus Energy Corp. (LEU - Free Report) , sporting a Zacks Rank #1 (Strong Buy) at present and Alamos Gold Inc. (AGI - Free Report) and Cabot Corporation (CBT - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LEU’s current-year earnings has been revised upward by 30.5% in the past 60 days. LEU beat the Zacks Consensus Estimate in each of the last four quarters, the average earnings surprise being 47.7%. The company’s shares have increased 35.1% in the past year.
The consensus estimate for Alamos’ current fiscal year earnings is pegged at 53 cents, indicating a year-over-year surge of 89.3%. AGI beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 25.6%. The company’s shares have rallied 17.8% in the past year.
The Zacks Consensus Estimate for CBT’s current-year earnings has been revised upward by 4.4% in the past 60 days. CBT beat the Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 2.3%, on average. The stock has rallied around 9.5% in a year.