The Ing C Olivetti & Co SpA case is teetering between tragedy and farce as international investors view the soaring debt profile only just disclosed with rising alarm – and are forced to watch the discredited regime of Carlo de Benedetti reinstall itself by the back door now that the outsiders they had been promised to sort things out have been eased out. The alarm over the rising debt picture is caused by the total darkness that shrouds the company’s operations, after debt almost doubled between the end of June and the end of August, leaving analysts to fret over whether this was a seasonal hiatus or heralded an alarming worsening of the situation. We have no record of debt movements month by month, so the the new figure highlights the need for a clear strategy to get the debt down, one Milan industrial analyst told Reuter. Olivetti promised unconvincingly that its debt would come down by the end of the year, but gave no details to back up the bald assertion. Country managers such as those in the UK and Spain are talking up the prospects for the company and the underlying soundness of its business, but their listeners are coming to realize that those in the corporate provinces are as much in the dark about what is really going on as are the company’s investors and other outsiders. The true state of the business is known only to a handful of people in Ivrea. Olivetti meets Milan analysts today, London analysts tomorrow, and new chief executive, Roberto Colaninno will have to give investors a clear perception about what is really happening at Olivetti, asserted the Milan-based analyst. It has to do what it has hitherto studiously avoided doing and give a clear answer to what will happen to the personal computer company, exactly what businesses are due to be sold off and what the future holds for its fast-growing cellular and fixed-line telecommunications interests – the cellular company says it has all the cash it needs, but if some of that cash turns out to be only commitments from Olivetti, it may find the money is not there after all. Further pressure has been exerted on Olivetti by Italy’s small shareholders association and the committee of neglected small Olivetti shareholders which demanded the election by shareholders of a new board as the only way of saving the company. The two groups have asked foreign funds, which control up to 25% of Olivetti’s shares, not to be content with just one member on its board representing shareholders, as suggested by Olivetti – foreign fund managers want to nominate lawyer Dario Trevisan as a non-executive director, but while he has voted on behalf of foreign funds at Italian shareholder meetings, he has no previous experience as a non-executive director. Olivetti insists that 150 pages of details on its financial accounts has answered all questions posed by reglator Consob.
