Parmalat agrees settlement on US class action

Italian dairy group Parmalat SpA has reached an agreement to settle an investor class-action suit against it in the US Southern District Court of New York, the company said.

"As a result, Parmalat will cause 10.5 million shares of stock to be issued in full satisfaction of any and all claims asserted against it in the class action worldwide," Parmalat said in a statement. The company said it would also pay €1 million of the cost for notifying class members of the settlement. The settlement is subject to the approval of the court, Parmalat said.

In December 2003 the dairy group collapsed under about €14 billion of debt in Europe's largest bankruptcy case.

A company spokesman said: "This removes the issue of the class-action suit, which has probably weighed on the stock over time, in return for a nominal payment.