|Società per azioni|
|Jean-Marc Bernier (CEO)|
|Products||Milk and dairy products, fruit juice, tea|
|Revenue||EUR6.416 billion (2015)|
|EUR276.9 million (2015)|
|EUR145.8 million (2015)|
Number of employees
|27,596 (end 2015)|
Parmalat S.p.A. is an Italian multinational dairy and food corporation. Having become the leading global company in the production of long-life milk using ultra-high-temperature processing, the company collapsed in 2003 with a EUR14bn ($20bn; £13bn) hole in its accounts in what remains Europe's biggest bankruptcy. Since 2011, it has been a subsidiary of French group Lactalis. Today, Parmalat is a company with a global presence, having operations in Europe, North America, South America, Australia, China, and South Africa.
Still specializing in UHT milk and milk derivatives (varieties of yogurt, cheese, butter, ice cream, etc.), the group also sells fruit juices distributed under the brand names Lactis, Santal, Malù, and Kyr. Its worldwide operations include almost 140 production centres and some 16,000 employees, with 5,000 Italian dairy farms supplying it. Its shares are listed on the Borsa Italiana.
In 1961, Calisto Tanzi, a 22-year-old college dropout, opened a small pasteurisation plant in Parma. Two decades later, the company had grown into a multinational corporation diversifying into milk, dairy, beverage, bakery, and other product lines in the 1980s, becoming listed on the Milan stock exchange in 1990, and expanding further in the 1990s. By 22 April 2002, Parmalat's share price had reached a record and the company was valued at EUR3.7bn, employing over 30,000 people in 30 countries. The company began to expand and had listed in its portfolio amongst other things: an expansion in the space of a decade from six countries into ownership of ParmaTour (a travel group) and Odeon TV, Parma F.C., Paulista Futebol Clube and S.E. Palmeiras.
In 1997, Parmalat jumped into the world of financial markets in a big way, financing several international acquisitions, especially in the Western Hemisphere, with debt. But by 2001, many of the new divisions were producing losses, and the company financing shifted largely to the use of derivatives, apparently at least in part with the intention of hiding the extent of its losses and debt. In February 2003, chief financial officer Fausto Tonna unexpectedly announced a new EUR300 million bond issue. This came as a surprise both to the markets and to the CEO, Calisto Tanzi. Tanzi forced Tonna to resign and replaced him with Alberto Ferraris. According to an interview he later gave Time magazine, Ferraris was surprised to discover that, though now CFO, he still did not have access to some of the corporate books, which were being handled by chief accounting officer Luciano Del Soldato. He began making some inquiries and began to suspect that the company's total debt was more than double that on the balance sheet.
The plan for a EUR300 million fundraising effort was dropped in September 2003 and the company's shares depreciated significantly as a result of the publicised concerns raised over transactions with mutual fund Epicurum, a Cayman-based company linked to Parmalat by November. Ferraris resigned less than a week after the public fall-out and was replaced by Del Soldato. Del Soldato resigned the next month, unable to get cash from Epicurum fund, needed to pay debts and make bond payments totalling at least EUR150 million. Bonlat was a subsidiary of Parmalat set up in the Cayman Islands. Bonlat's bank, Bank of America, then released a document showing EUR3.95 billion in Parmalat's bank account as a forgery. Tanzi himself resigned as chairman and CEO. Hundreds of thousands of investors lost their money and would never recover it.
Prime Minister Silvio Berlusconi changed bankruptcy laws by decree to allow a company to seek accelerated protection from creditors, by giving extraordinary powers to a government-appointment administrator (commissario). Enrico Bondi was named commissario.
Calisto Tanzi, once a symbol of unlimited success, was detained hours after the firm was declared officially insolvent in late December and admitted that there was a hole of EUR8 billion in Parmalat's accounts, but denied any cover-up. The arrest of five other executives followed. The auditors of the administration eventually determined that the debts amounted to EUR14.3 billion, which was almost eight times the sum originally stated. Several of the company's subsidiaries subsequently went insolvent, including its Brazilian, Argentinian and American operations and its football club in Parma.
Tanzi was eventually charged with financial fraud and money laundering. Among the questionable accounting practices used by Parmalat: it sold itself credit-linked notes, in effect placing a bet on its own credit worthiness to conjure up an asset out of thin air. After his arrest, Tanzi reportedly admitted during questioning at Milan's San Vittore prison that he diverted funds from Parmalat into Parmatour and elsewhere. The family football and tourism enterprises were financial disasters as well as Tanzi's attempt to rival Berlusconi by buying Odeon TV, only to sell it at a loss of about EUR45 million. Tanzi was sentenced to 10 years in prison for fraud relating to the collapse of the dairy group. The other seven defendants, including executives and bankers, were acquitted. Another eight defendants settled out of court in September 2008. In September 2009, three lawsuits by Parmalat Capital Finance Ltd. and Enrico Bondi, CEO of Parmalat, against Bank of America and auditors Grant Thornton were dismissed.
By 2011, Parmalat had grown cash to EUR1.5 billion.Lactalis quickly purchased nearly 30 % of the company on the open market and in July 2011 succeeded in its EUR2.5 billion takeover offer, reaching a control of 80 % shares at EUR2.6 per share.
In 2015 revenues reached EUR6.42 billion and EBITDA EUR444.5 million. Lactalis prepared to delist Parmalat in 2016 with a buyout offer at EUR2.8 per share to acquire the remaining 12 %, then raised to EUR3 but eventually failed due to opposition by hedge fund Amber and others. In December 2018, Lactalis was thought to have almost reached 95 % shares at an open market price of around EUR2.85/share and to be about to launch a new takeover and delisting offer. Lactalis acquired 7 % of the shares from Amber and other shareholders which had opposed the 2016 takeover, and confirmed the delisting for March 2019.