A bankruptcy court in Rome has granted beleaguered food company Cirio insolvency status.
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Three administrators have been appointed to determine whether Cirio should also be given temporary protection from its creditors. Mario Resca, chairman of McDonald’s Italia, is one of these three, who will submit their report in one month.
A court will then use this report to decide whether Cirio and its Cirio Del Monte Italia division should be placed in extraordinary administration, which would give them a breathing space of up to two years in which to turn performance around, reported Reuters.
Cirio’s shareholders voted last week to liquidate the tinned-tomatoes-to-juice firm, which was declared in default on more than a billion euros of debt last year. Earlier, its bondholders had rejected a plan to restructure Cirio’s debt.
Should the company go into extraordinary administration, it is likely that the three administrators appointed this week will be charged with nursing the firm back to health or splitting it up.
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By GlobalDataIt is thought unlikely that the government will allow Cirio to go under, and it is believed that the country’s four principal banks – Banca Intesa, UniCredito, Sanpaolo IMI and Capitalia – are ready to help out, although their offer of help will inevitably not be without conditions.
