The Mexican unit of troubled Italian food group Parmalat has said it has been able to pay the wages of its 400 employees, but has not yet paid milk producers who are due for payment this week.

Parmalat de Mexico said last week that Banamex, the Mexican arm of financial firm Citigroup, had frozen its accounts and it was therefore unable to access the money required to pay its workers. However, on Monday the company said it had now paid its employees, but that payments to milk suppliers were still pending, reported Reuters.

The company did not say where it had obtained the money to pay the salaries.

Parmalat has said its operations in Mexico are viable but have been threatened by the freezing of the accounts, Reuters said.