(ANSA) - Traders snapped up Parmalat shares on Thursday as the dairy giant returned to the bourse almost two years after its collapse in a massive fraud scandal dubbed 'Europe's Enron'.
The shares opened at 3.15 euros, more than three times their nominal value of one euro. Some 100 million shares exchanged hands in the first hour of trading, with the stock dropping slightly to 3.06 euros.
Government-appointed Parmalat administrator Enrico Bondi was delighted with the response, saying the company had been saved. "Parmalat is an industrial reality... and now that it has returned to the stock exchange, I hope its future will be healthy and successful," Bondi said.
Trading in Parmalat's shares was suspended at the end of December 2003 when the group first began to go under in a false accounting scam that resulted in estimated debts of 14.5 billion euros. But Bondi has succeeded in putting the dairy group back on its feet, pruning away many of Parmalat's non-core activities and organising its relisting at a capitalisation of 1.6 billion euros.
The relisting follows a 12-billion-euro debt-for-equity swap. The managing director of the Italian bourse, Massimo Capuano, also expressed satisfaction on Thursday saying that "this is a very positive reception. Parmalat's return is further proof that if Italian companies present themselves to the market with clear ideas and a solid project they get a good response," Capuano said.
Agriculture Minister Gianni Alemanno commented that "this is a great success... Parmalat has emerged from a catastrophic crisis which weighed heavily on the country's image." Alemanno added that he hoped "Parmalat remains Italian."
Earlier this week, Italian milk-producing company Granarola said it was considering buying out Parmalat. Sources close to the unlisted firm say it is considering a bid of almost two billion euros. Meanwhile, a consumer rights' group warned investors to
show caution in buying Parmalat shares.
Altroconsumo said that "we advise investors to be careful. Parmalat creditors have become its shareholders but the consolidation of Parmalat has yet to be completed and so small investors who held bonds in the company will continue to lose out."
Parmalat's meltdown left more than 150,000 investors with virtually worthless bonds.
PARMALAT AND THE BANKS
Stock market observers said one of Parmalat's key attractions for investors was the possibility of a string of successful lawsuits against more than a dozen banks. Bondi has gone after the banks, accusing them of colluding to hide Parmalat's crisis and selling its bonds to small investors even when they knew the company was failing.
A document published in newspapers on Tuesday relating to the group's relisting showed that Parmalat was suing Credit Suisse First Boston for 7.11 billion euros. Parmalat has already sued Credit Suisse for more than 238 million euros over a convertible bond issued in 2002 by a Brazilian subsidiary which was underwritten by the Swiss-based bank.
The published document - a supplement to the group's relisting prospectus - showed that Parmalat was also suing three other unnamed banks for a total of 8 billion euros in damages.
It listed other legal battles launched by the group, including a 4.4-billion-euro suit against J.P. Morgan, Unicredito Italiano, Unicredit Banca Mobiliare, UBM and Unicredit Banca d'Impresa; a 1.8-billion-euro suit against Unicredit Banca Mobiliare, UBM, Banca Caboto and Banca Intesa; and a 126.5-million-euro suit against Merrill Lynch International and Sires Stat Limited.
Parmalat has also filed three lawsuits in the United States against the group's former auditors Deloitte & Touche and Grant Thornton, Citibank group and Bank of America.
