The Brazilian unit of scandal-ridden Italian food group Parmalat has filed for bankruptcy protection from creditors.
Parmalat Brasil Industria de Alimentos will be given two years to pay off its debts whilst under court protection from its creditors if the filing is successful, reported Reuters. The company’s creditors include Citigroup, Bank of America and Standard Chartered.
Parmalat Brasil’s Italian parent is in the midst of a huge financial scandal and is believed to be €14bn (US$17.5bn) in debt. Since Parmalat’s financial crisis emerged in December, its Brazilian unit has had difficulties paying its suppliers and is facing several lawsuits.