The Directorate-General for Treasury and Finance (DGTF), the Technical Unit for Monitoring and Oversight of the State Business Sector (UTAM), and Parpública concluded that the proposal made by Inapa to obtain an injection of 12 million euros, needed to address a short-term debt of its German subsidiary, “did not meet solid conditions, nor demonstrate the economic and financial viability that would guarantee the reimbursement to the State.”
The paper distribution company announced on Sunday night that the lack of this amount would necessitate filing for bankruptcy for the German unit and that the impact of this request would lead to a similar situation for the entire group, which employs about 200 people in Portugal.
“The Government will monitor the bankruptcy process,” the Ministry of Finance told PÚBLICO. According to the same source, “the executive became aware of the critical situation in which Inapa found itself” after the Securities Market Commission (CMVM) decided to suspend the company’s shares on July 11, when Inapa extended for ten days the repayment of a convertible bond issuance.
On that occasion, the executive summoned Parpública to a meeting “where it was conveyed that Inapa had requested an immediate injection of 12 million euros to meet the cash flow needs of its subsidiary in Germany, while another request for 15 million euros to restructure the company was already under review,” explained the ministry led by Joaquim Miranda Sarmento.
“Considering the negative opinions on this financing, the fact that Inapa did not present any recovery strategy, that Parpública holds 45% of Inapa but is not the majority shareholder, and that Inapa is a private company without an activity considered strategic for the Portuguese economy, the Ministry of Finance confirmed Parpública’s opinion not to proceed with the requested financing operations,” stated the ministry.
In statements to Lusa, the Minister of Economy, Pedro Reis, reinforced the idea of the improbability of the State being reimbursed in the case of any loans to Inapa.
“I would only say, solely and exclusively, one thing: it is very important to ensure the care and protection of taxpayers’ money every time decisions are made regarding the restructuring of companies, regarding support to companies,” said the minister, on the sidelines of the kickoff meeting of the Working Group for the European Regulation on Critical Raw Materials in Lisbon.
“Often it is easier to demand public support, but it is often necessary to see the public interest, to assess well where it is,” Peter Reis further stated.
In addition to Parpública, Inapa also has as shareholders Novo Banco (6.55%) and Nova Expressão (10.85%), an advertising investment planning company. Almost 38% of the capital is dispersed on the stock market.
The main activity of Inapa is paper distribution (almost 90% of turnover in 2023), but the company also has businesses in the distribution of packaging materials and printing for the graphic industry.