Parmalat misses loan deadline

Parmalat, the Italian food group facing the worst financial crisis in its 40-year history, admitted last night that it would not be able to meet the deadline on a $400m (£230m) payment.

The group was due to have paid minority investors in its Brazilian business late yesterday to buy out their shares but acknowledged it would miss the deadline. "The funds are not immediately available, therefore we are seeking a delay," a spokesman said.

The company, whose products include milk and soups, said it was still negotiating with the minority shareholders over an extension of the deadline. Talks were expected to continue well into the night, with Parmalat hoping they would be continued today if no agreement was reached.

Last week Parmalat made the repayment on a €150m (£108m) bond several days late, raising fears about its financial health. Investors were baffled that a company, which according to its own figures had €867m in cash at the end of June was apparently struggling to meet payment deadlines.

The crisis began earlier this month when Parmalat was forced to admit that it had been unable to withdraw almost €500m from an offshore investment fund, Epicurum, despite earlier assurances that the money would be easily accessible.

This week the founder, chairman and chief executive of Parmalat, Calisto Tanzi, resigned amid the mounting financial crisis. He was replaced by Enrico Bondi, a turnaround specialist.

Yesterday Parmalat said that it had brought in accountants PricewaterhouseCoopers to conduct a forensic examination of the company's accounts. The accountants will work alongside investment banks Lazards and Medio banca and a legal team to prepare a restructuring programme which Parmalat has said it will publish at the end of next month.

Investors are concerned that the investment in the Cayman Islands-registered fund Epicurum - which specialised in the leisure sector through listed, unlisted and derivative securities may not be the only one in which Parmalat had invested. Untangling the group's complex tangle of assets and liabilities will be one of the first tasks facing PwC and the new management at Parmalat.

One of Parmalat's top creditor banks, Banca Intesa, said it might step in again to help.