What a difference a month can make.
In January, officials at Parmalat USA, the American subsidiary of the scandal-ridden Italian food and beverage giant, said its business was not for sale. Only one month later, the company filed for Chapter 11 bankruptcy protection and was out shopping its assets to potential buyers. The Wallington, N.J.-based dairy company was cagey about who might be interested, saying only several potential buyers had signed confidentiality agreements and letters of intent.
It's doubtful the company will be sold whole, since the parts are more valuable than the sum. Yet, with the parent company's finances in disarray, it's difficult to assign a value. While money has been disappearing off financial statements faster than you can turn milk into cheese, Parmalat USA has lucrative additions for someone's stable. Court filings list assets of $414 million and liabilities of $316.4 million; its largest unsecured creditor is Comerica
Parmalat has two primary lines of business: milk and cookies. Mmmmm. While it sounds like a can't-lose combination, continuing revelations of financial shenanigans by owner Calisto Tanzi made suppliers and vendors nervous. As a result, they demanded cash on delivery or pre-payment, as a condition for continued business. With the parent company $18 billion in debt, there were no more loans being shipped across the Atlantic.
Parmalat subsidiaries Farmland Dairies and Milk Products of Alabama reportedly lost $12.5 million on sales of $577.5 million last year. In contrast, its Sunnydale Farms division remains among the country's largest fluid milk-producing plants. Sunnydale Farms would be attractive to a company like Dean Foods
Other possible suitors might eventually include Nestle (OTC: NSRGY) and Group Danone
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Fool contributor Rich Duprey likes to eat Oreo cookies with a cold glass of milk and does not own stock in any of the companies mentioned.