Milking Money out of Parmalat

At Parmalat's headquarters in Collecchio (Parma), top management was desperately trying to rescue the Group, negotiating a cash infusion of €3 billion with LBO funds, Blackstone and KKR, and the investment banking arm of Deutsche Bank. At the end of 2003, Parmalat Group was Italy's eighth largest industrial concern and arguably one of its most international. With over 37,000 employees, 139 production sites in 30 countries in all 5 continents, revenues in excess of €7.6 billion at the end of 2002, EBIT of about €600 million and a market capitalization of €2.3 billion, Parmalat was one of the largest food-processing companies in the world and a renowned leader in UHT (Ultra High Temperature) milk production. Before that time, very few analysts had presented doubts about the Group's financial strength, and none could imagine the dimensions of the financial problems that would soon be discovered.