The administrator to Italian conglomerate Parmalat yesterday outlined a restructuring plan that will require creditors to exchange some €14.8 billion of debt for equity in a dairy group many investors fear may be worth no more than €1.5 billion.
Administrator Mr Enrico Bondi said the plan also called for the sale of small, unprofitable units worldwide but the retention and revamping of most subsidiaries in large markets, including the chaotic operations in Italy.
According to updated figures released yesterday, Parmalat's gross operating profit last year stood at about €200 million on sales of €5.8 billion while gross debt reached €14.8 billion.
Mr Bondi said the plan would focus on boosting the gross profit margin to 10 per cent by 2007.
Parmalat would concentrate on maintaining 30 of the 120 brands it produces around the world.
The project comes as international creditors grow worried that the Italian government could seek to push through a project without their support - a move that could undermine investor confidence in Italian securities.
