The crisis is not easing at Ing C Olivetti & Co SpA, and as investors fret that the next major development will be yet another vast rights issue to fund its commitments to the Omnitel-Pronto Italia SpA cellular consortium, they would have been dumping the stock at fire-sale prices in Milan yesterday if the exchange […]
The crisis is not easing at Ing C Olivetti & Co SpA, and as investors fret that the next major development will be yet another vast rights issue to fund its commitments to the Omnitel-Pronto Italia SpA cellular consortium, they would have been dumping the stock at fire-sale prices in Milan yesterday if the exchange had not kept suspending trading in an effort to prevent the price going into free fall. Rules of the Milan exchange say that trading cannot begin in a share if there is no quote within 10% of the last close, up or down, but that the margin can be widened to 15% or 20% in exceptional circumstances. The shares opened two hours late at 619 lire, a fall of 17.4% from Wednesday when it had last traded at 749.4 lire before the suspension was announced. The Consob regulator had already tried to widen the bands to 15% without getting a bid. Consob has said that it will continue its investigation of Olivetti’s accounts and plans to meet the company’s internal auditors this week. An investment banker in Milan, who asked not to be named, told Reuter Olivetti could not survive without shutting down or selling off unprofitable parts of the business, in particular the personal computers subsidiary. The shares were later suspended again as the price touched 20% limit down. On the operational front, a union leader said Olivetti may be planning to sack thousands of people, maybe as many as 5,000. Giorgio Cremaschi, Fiom union secretary in the northwestern Piemonte region where Olivetti is based, told reporters: Olivetti is in the throes of a dramatic crisis. There is talk at the highest levels in the company of thousands of sackings. We heard rumors on Saturday of 5,000 redundancies, he reported. We’re not asking for state handouts, we’re asking the government to intervene in a dramatic situation, he pleaded and chief executive Francesco Caio and other senior managers of the group are to meet Italian Industry minister Luigi Bersani in Rome on Wednesday.