Parmalat to keep US business - report
on to its US subsidiaries if it does not receive a suitable bid for
its operations. It was reported today that the company is
considering a "stand alone" programme for the US businesses.
According to a Reuters report, the Italian group has received unsuitable bids for its business activities in the US. And it is this lack of interest in its units that has led sources close to the company to suggest that the future for the US arm may well lie with Parmalat.
Earlier in the year the company's government appointed turnaround expert, Enrico Bondi, announced that the company was going to try to exchange "debt for equity" by streamlining its businesses. The company announced that it planed to concentrate on its core assets and use the other assets to clear off debt.
In February the US arm of its business filed for bankruptcy, and it was widely thought that these units would be among the first to go if Parmalat was to survive in the long run.
However, even when this announcement was made earlier in the year, observers were suggesting that this plan may not cover the debt discovered in the company's books. And it is a possibility that this may be the case with the US business. Bids made from company's such as Dean Foods would not be enough to tackle the group's debt problems, analysts are claiming.
" The assets are not off the block but the company and creditors may decide that a stand-alone plan is better than a sale", Reuters reported a source close to the company as saying.
It is estimated that combined, the units lost $12.5 million last year on sales of $577.5 million. The Parmala scandal erupted when a €14 billion black hole was discovered in the company's books last December. It announced its plans to streamline the business in February.
It is thought that the company will disclose its plans for asset at a bankruptcy court hearing on May 19th in New York.
