Olivetti files for creditor protection
- 12 March, 1999 13:05
Olivetti Computers Worldwide SpA, Italy's main PC manufacturer, on Tuesday presented a formal request to go into controlled administration in order to protect itself from creditors, company and union sources said.
A company administrator, accompanied by two legal advisers, deposited the necessary documents at the Palace of Justice in Ivrea. Approval for the move was given at a shareholders' meeting on February 25, a company spokeswoman said.
"Controlled administration protects the company from demands for payment on the part of suppliers," according to a company official, who asked not to be named. "An administrator will be appointed by the court and the company will continue to operate normally. The measure was technically necessary to enable the management buyout to go ahead as planned."
The buyout, led by CEO Roberto Schisano, was also approved by shareholders on February 25.
Trade unions representing employees of Olivetti Computers Worldwide, which was sold to US financier Edward Gottesman's Piedmont International SA in 1997, are pessimistic about prospects for a solution to the crisis. The management buyout would involve a sale by Piedmont of most of its stake in Olivetti.
"There's talk of an industrial partner, which could be Olidata SpA, but Olidata produces computers for the low end of the market and has only around 150 employees. Such a partnership could be disastrous," said Laura Spezia, secretary of the Fiom-CGIL trade union in Ivrea.
"The real problem is finding a financial partner. Olivetti SpA has a 20 per cent stake in Olivetti Computers Worldwide. The company is able to find 102 trillion lire ($US58 billion) for a takeover bid for Telecom Italia SpA but isunable to provide guarantees to the banks for a 130-billion-lire loan for Olivetti Computers Worldwide.
Magistrates in Ivrea have launched an investigation into the sale of Olivetti Computers Worldwide to Gottesman to try and determine whether it was a genuine sale or just a pretense, Spezia said.