Parmalat debt reaches €14.3bn

PARMALAT’S debt reached €14.3 billion at the end of September, almost eight times the amount reported by the dairy company’s previous management before it went bankrupt.

Italy’s biggest food company had “negligible’ assets in the first nine months of 2003, Parmalat said in a statement, citing the preliminary findings of a review undertaken by its new auditors, PriceWaterhouseCoopers LLP.

Operating profit was €121 million, less than a fifth of what Parmalat reported.

The maker of long-life milk and Archway biscuits collapsed last month after it said a $4.9 billion bank account in the US didn’t exist. Parmalat founder Calisto Tanzi, who has spent the past month in a Milan jail, has told Italian investigators probing the bankruptcy that there were at least €8bn in false assets and hidden losses on the company’s books.

“The figures are pretty terrible,’ said Andrew Sentence, an analyst at Gestnord Intermediazione SpA in Milan.

Revenue at the end of the nine months was €4bn compared with the €5.4bn originally disclosed by Parmalat, the statement said. Parmalat previously had reported €1.8bn of net debt at the end of September.

The company’s business has been “substantially stabilised,” since it filed for bankruptcy in a Parma court in December 24, the statement said.

Tanzi, 65, is among 11 people who have been arrested in connection with the investigation by magistrates in Milan and Parma. He will be questioned again today in Milan’s San Vittore jail following a six-hour interrogation on Friday.