Montedison's losses come out 30% higher than first stated

MILAN (Reuter) - Montedison, the industrial arm of the financially troubled food-to-chemicals group Ferruzzi, revealed yesterday that 1992 losses were about 30 per cent higher than first announced at L1,680bn ( pounds 745m).

Carlo Sama, acting vice-president, told a shareholders' meeting that the increased losses were suffered by a group financing company, Montedison International Holding.

He gave no further details and did not immediately explain why the loss had not appeared on the balance sheet published on 28 May.

Creditor banks are drawing up a rescue plan for the group, Italy's second-largest private firm, after Ferruzzi said earlier this month it could no longer keep up payments on its L30,000bn of gross debt.

The banks intend to lay claim to the Ferruzzi family's 48 per cent shareholding in Ferruzzi Finanziaria, the parent company.

Banks, in agreement with the group, have already named a new president and managing director to implement the eventual reorganisation of Ferruzzi, which is likely to include heavy asset sales as well as a debt restructuring.

Arturo Ferruzzi, son of the firm's founder, announced at the shareholders' meeting that he was standing down as Montedison's president to make way for Guido Rossi, the former head of Consob, Italy's stock market regulator. Shares in Montedison and Ferruzzi Finanziaria had already been suspended on the Milan bourse pending an announcement.

Ferruzzi and Montedison share prices have shed around half their value since the company first announced it was in crisis.

'It is really not on,' one share analyst said. 'Both the company and their auditors have a lot of questions to answer.'

Mr Sama said the company was also making a L500m provision against any possible liability stemming from the flight of Giuseppe Garofano, the former company president who is wanted in connection with Italy's long-running corruption scandal.