He will back its activities in the United States and Asia

Three months after his release under judicial administration, Parmalat is negotiating its survival plan. At a meeting with representatives of 50 major creditors (banks, investors and underwriters of obligations... associations), Friday in Milan, the extraordinary Commissioner, Enrico Bondi, presented the key points of the restructuring plan of the first Italian agri-food group, which now displays a liability of EUR 14.8 billion (including 4.2 billion euros in bank debt). To avoid the threat of bankruptcy resulting ipso facto a liquidation of all of the assets of the group, the alternative is a concordat through the transformation of all of the debts into shares. "Between the bankrupt and the concordat, I propose the second track, because that means the continuation of the business." "I did not intend to impose a solution, but it seems to me that there is a form of consensus", found Enrico Bondi, the outcome of a meeting of five hours. According to the procedure which must still be approved by a quorum of more than 50 of the creditors, they will be asked to waive their claims in exchange for the distribution of new shares through a capital increase of the "new Parmalat", after his readmission in the stock market. It is not yet decided if the group founded by Calisto Tanzi will make his return on the stock market through the creation of a new company or the simple readmission of Parmalat Finanziaria.

Severe weight loss cure

Subject to the approval of the Assembly of creditors, the procedure of arrangement must still be validated by the Court of Parma and the industry Minister, Antonio Marzano, who has five months to approve the rescue plan. But the extraordinary Commissioner, Enrico Bondi, does not hide his desire to go fast and complete the process next June for a rating on the stock exchange in September. "In a liquidation of the Cirio type, creditors could just hope recover 10 to 15 of their development." "However, the treatment of weight loss of Parmalat must allow creditors to participate fully in the relief of the group," said the entourage of Enrico Bondi.

To convince creditors to adhere to the formula of concordat, the extraordinary Commissioner presented the financial objectives of the new group. Through a drastic reduction of its international presence (which will increase from 30 to 10 countries) and the number of its (reduced from 120 to 30) marks in two years, the "new Parmalat" sets goal to double its operating at 6 in 2005 margin, and then to the 10 in 2006 to a turnover of 3.8 billion euros at the end of its transformation (against 5.8 billion euros at the end 2003), with a financial debt "in bonus" (payable) reduced to EUR 500 million. To achieve this, group plans to reduce its global workforce of 32,000 to 17,000 employees, reducing 46 to 18 the number of its operating subsidiaries. He will back its activities in the United States and Asia.

Despite the extraordinary Commissioner will loop to the faster rescue plan to cede the reins of the group to a new team in September, some uncertainties remain on the timetable and even the feasibility of the operation. In addition to the reticence of consumer associations on the principle of conversion of debts into shares, Parmalat will have to deal with several action incurred by the Securities Exchange Commission (SEC) and certain categories of creditors, not to mention the three "class actions" launched by holders of bonds in the US courts. For its part, Enrico Bondi has not excluded to "repeal acts" against the creditor banks actively participated in the "creative finance" of the former empire of Calisto Tanzi.