Ex Ilva, market and Moody's with a straight leg: ArcelorMittal away immediately from Taranto


<! – -> He didn't want us. I'm not the market, but also the agencies of rating. While the Government awaits the response of the Mittal after the summit on Wednesday at the end of which the President of the Council Giuseppe Conte he gave 48 hours to the colossus of the French-Indian steel for a reverse gear on the withdrawal from the lease of the business branch, Moody's, the second of the three sisters of the rating which establishes the classification of creditworthiness followed by all world investors, enters a straight leg in the dramatic story of the former Ilva. Group finished in commission administration and taken over by ArcelorMittal and which the Indians now want to get rid of. In essence, for the stars and stripes agency analysts Lakshmi and Aditya Mittal the sooner they do it the better.

lakshmi mittal

"We are changing the outlook on ArcelorMittal's negative assessments, reflecting the strong decline in the group's profits recorded this year in the context of slow final market demand", he has declared Goetz Grossmann, in fact, principal analyst of Moody's for ArcelorMittal when the rating is confirmed Baa3 to the company associated however with a cut ofoutlook (outlook), revised from stable to negative.

"In particular – added the expert – if the weakness of the market should persist longer than expected or even worsen during 2020" there would be "a negative pressure on the rating", he added.

And then the passage that shook the wrists not only in Taranto, but also among the parties of the majority of the government that are trying to avoid the explosion of the social bomb (between direct and induced employees they risk their jobs over 20 thousand workers, over one stop GDP by 0.2%). "In the same way – explained Grossmann – the inability to perform the withdrawal and the resolution proposed lease and subsequent purchase of Ilva (announced November 4, 2019) in smooth and timely manner would add further pressure to downgrade".

A snip to the rating of the world leader in steel would mean higher debt burdens that in second place, on constant conditions and that is without resolution of the crisis of US-China duties which has dramatically slowed the global economy and consequently the demand for raw materials, would impact on the last line of the budget through minor profits. Profits already plummeting this year.

Valuing the thesis of the Giallorossi government according to which the real reasons for the farewell to Taranto are purely economic, ArcelorMittal has lost over half a billion in three months (loss of 486.52 million euros) and has seen the operating result fall from 5.5 billion dollars to 908 million (-83%), with one production of steel dropped, despite the increase in the company perimeter and production capacity, from 22.8 to 20.2 million tons and turnover fell by 4.5% compared to 2018 from 57.7 to 55.1 billion dollars. Results announced to the market yesterday and which did not weigh on the stock market where ArcelorMittal surprisingly earned almost 7%. The reason? And here is the second fact that has thrown alarm among the M5S-Pd ministers.

According to some financial analyst, in fact, it was not just the commercial truce between the United States and China to leave hope for a recovery in the steel market or that i negative results were widely anticipated (and even better than consensus) to sustain stock price increases, but also the firmness with which the management of the French-Indian giant reaffirmed its desire to withdraw from the contract stipulated just a year ago to get its hands on the former Ilva. A deal long pursued by Lakshmi Mittal, now become a problem, at least in the short term and to be released as soon as possible.

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