The Mexican unit of troubled Italian food group Parmalat has agreed to sell its industrial operations to local dairy firm Grupo Industrial Lala.

Grupo Lala, which is one of the country’s largest dairy firms, also signed a deal to use the Parmalat brand name, reported Reuters. Terms of the sale and licensing agreement were not disclosed.

Parmalat said proceeds from the sale would be used to pay down the Mexican unit’s debt. Parmalat Mexico employs 400 people and has a plant in Jalisco, in western Mexico, and three distribution centres.