Parmalat Finanziaria considers equity-for-debt swap

By Jeff Pines

Washington, March 16 - Parmalat Finanziaria SpA said it is considering swapping its outstanding debt for equity that would trade on a regulated exchange as part of a plan to take the company out of bankruptcy, the company said in a news release.

It described the means by which this will carried out as "in an advanced state of development."

Negotiations on the plan could take another two months, and the company said it hopes to present the plan by May or June to the Italian minister of productive activities.

Parmalat, which filed for bankruptcy on Dec. 24, said it plans to turn its operations into a leaner, centrally-coordinated Italian group with a multinational strategy, which includes divesting non-core assets. It plans to focus on milk and juice drinks and cut the number of its brands from 120 to 30. It noted that six brands account for 80% of the group's sales.

To help it with liquidity, the company secured €105.8 million financing from a pool of banks, which includes a €53.4 million trade receivables facility and a €52.4 million current account overdraft. Unicredit Banca d'Impresa SpA is the agent for the financing.

Parmalat estimates its total debt is €14.8 billion with €9.4 billion in bonds, €4.2 billion in loans from banks and €1.2 billion in liabilities in connection with derivatives, securitizations and promissory notes. But the numbers are still under review and the company's debt could actually be higher, it said.

In addition, the company puts its EBITDA for 2003 at about €200 million.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.