Parmalat restructuring presented
An Italian turnaround expert in late June presented the Italian government with a restructuring plan aimed at saving Parmalat S.p.A., the worldwide dairy giant that has been in bankruptcy protection after a massive fraud scandal late last year.
The plan by Enrico Bondi, who was appointed by the government to run Parmalat late last year, calls for the sale of the dairy group's non-core assets, slashing the number of the group's brands from 120 to 30 and concentrating on fruit juice, milk and milk-related products. Bondi already put on sale the group's chocolate company, Streglio, and part of the tourism business run by the family of Parmalat founder Calisto Tanzi.
Italy’s minister of industry is expected to approve the plan quickly. It then must be approved by creditors at a meeting slated for November or December. A spokesman said Parmalat is expected to return to strong profits by 2005 and 2006, according to the ANSA news agency.
The Parmalat scandal unfolded in December when the company acknowledged that it didn't have nearly $5 billion it had claimed was in a Bank of America account. Soon after, Parmalat filed for bankruptcy protection. An audit put its debt at about $18 billion. Milan prosecutors have requested indictments for 29 people, including Tanzi.