Caribbean Net News: Missing US$600m in Cayman Islands fund deepens crisis for Italian food giant

MILAN, Italy (AFP): Credit rating agency Standard and Poor's slashed its debt rating for crisis-struck Parmalat for the second time in two days on concerns the Italian food group could default on its bonds.

The cause of Parmalat's latest problems lies in a statement on Monday that the company had been unable to recover US$605 million dollars from a fund called Epicurum, based in the Cayman Islands.

Epicurum reportedly specialises in leisure and entertainment, a long way from Parmalat's international business of food and dairy products that include Pauls Milk and Archway cookies.

S and P cut Parmalat's debt rating to CC, two notches away from default status even though on Tuesday the agency chopped the company's debt rating to B-plus -- junk bond status -- from BBB-minus, which is considered investment grade.

Officials at the Milan stock exchange said that Parmalat's shares, which have been suspended from trading since Monday, would remain suspended pending further information from the company.

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