Parmalat debt reaches €14 billion

Related tags Calisto tanzi Parmalat

Italian food group Parmalat said on Monday that it had a net debt
of €14.3 billion ($17.6 billion) in September 2003, almost eight
times the figure given by former managers of the troubled group.

The new end-September figures from Parmalat but calculated by the accountants PricewaterhouseCoopers, show that Parmalat's true performance was much worse than it had claimed.

The company said that net debt at the end of September was €14.3bn, but back in November, in its official third-quarter results, Parmalat had said its net debt was €1.8bn.

According to a BBC report, the company said its core earnings stood at €121m instead of the 651m it had reported to investors for January-September 2003.

Sales for the same period had been €4bn instead of the €5.4bn it had claimed, while the full 12 months of 2002 had produced sales of €6.2bn euros instead of €7.7bn.

Most suppliers, it said, were being paid despite "negligible" cash reserves - although in the US and Brazil "crisis units" were having to be set up to help local managers stay afloat.

Parmalat's founder Calisto Tanzi, two ex-finance directors and two outside auditors are among 11 people arrested so far in the case. No one has yet been charged.

Parmalat operates in 30 countries with 35,000 staff.

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