Metinvest seeks to reduce its contribution to the steel project in Italy

Mining and metallurgical group Metinvest is looking for a new investor to finance a 3 billion euro ($3.4 billion) steel mill in Italy as the Ukrainian group tries to reduce its obligations, Bloomberg reports.

According to the agency, we are talking about finding an additional partner for the project on the site of Tuscany. The company wants to strengthen financing "given the risks associated with the war, given Metinvest's significant operational presence in Ukraine."

However, as noted, some potential creditors have become more cautious as a result of increased geopolitical risks, in particular the recent conflict in the Middle East

We have an idea about it, and we are continuing our dialogue with financial institutions in order to complete work in this direction," Metinvest told the agency.

At the same time, it is recalled that the Italian government has defined this initiative as a "national strategic project", and Metinvest Adria is a joint venture on the project "revival of steel in Italy". It is expected to produce 2.7 million tons of low-carbon steel per year and create 1,100 jobs in the region.

According to the initial plan, the financing was to consist of borrowed funds, government grants, and equity contributions from the JV partners. Metinvest has agreed to contribute over 500 million euros, or 75% of its total equity, but is now seeking to reduce this amount to less than 300 million euros. the pier in the port of Piombino.

"Metinvest's financial situation worsened after the company had to use cash reserves in April to repay bonds worth $428 million. Part of the company's assets in Ukraine were lost or damaged as a result of the Russian invasion. forces," the article says.

In addition, it is noted that this month S&P Global Ratings raised its assessment of Metinvest's creditworthiness after the bonds were repaid, but maintained a "negative" outlook on the business, noting the need to build up a cash reserve. According to S&P, by the beginning of May, Metinvest's available funds amounted to $150 million.

Metinvest is considering the possibility of attracting long-term financing and recently held meetings with investors to discuss the price and structure of a potential bond issue. Like most Ukrainian companies, Metinvest did not enter the bond market after the start of a full-scale invasion in 2022. Despite this, the group managed to fulfill its financial obligations and reduce its debt burden, according to a Bloomberg report. Her businesses