Confindustria plagued by the losses of Sole 24 Ore
ROME – The General Confederation of Italian Industry, Confindustria, has been severely affected by the losses of Italian business daily newspaper Sole 24 Ore, financial sources said Wednesday.
Confindustria played with Sole 24 Ore and got burned. The losses of the publication are eating into the assets of the association, generating unrest among business associates and sparking the risk of new defections, along the same lines as what happened with Fiat in 2011. This is all occurring now, just as the confederation is tasked with “positively evaluating” participation towards the necessary increase in capital of the publication, already at the centre of an inquest into alleged false accounting.
However, Confindustria does not have the necessary cash flow to carry out the operation, leaving only two choices ahead -- either liquidise assets in their portfolio or increase their membership quotas which in 2015 registered a new low, dropping 645,000 euros to a total of 3,762 million euros. In both cases however, the culpability of the devaluation of the Sole quota (67.5 percent) is significant, currently at the cost of 1.47 euros per operation for a total of 132 million euros, 330 percent over the value which the Borsa Italiana, Italy’s main stock exchange, attribute to the operations appraised to the publication.
In theory, the easiest way out would be to sell what is possible from assets, but this would not be enough to cover the capital increase that, according to figures circulated in recent days, could cost between 60 and 100 million. The financial worth of the association was evaluated by the 2015 budget at 290 million. However, the sum must be reduced by 132 million due to the participation of Sole 24 Ore, demonstrating a drastic devaluation. Hence, the remaining net worth stands at 158 million, before liquidation.
Vincenzo Boccia, elected with a great majority to president of the association last spring, is now in great difficulty, making the rounds of local associations to seek the financial support necessary to increase the capital of the newspaper. This ‘begging’ involves a new wave of discontent among industrialists, however, especially in this economically sensitive time when many companies are struggling. Businesses ask themselves -- Once the capital increase is achieved, who in fact could ensure that the company will be able to take off? The possibility of a reparative marriage with the Italian newspaper Corriere della Sera, at this point in the hands of Urbano Cairo, is waning.
Confindustria is partnered with ALUISS, Association for the Free International University of Social Students, in which Boccia had just introduced his trusted associate and Neapolitan editor Diego Giuda. Boccia’s partnership with Giorgio Squinzi, president of Confindustria, is very much broken.
The weight of all this on the shoulders of Italian entrepreneurs is bound to be heavy, not to mention the damage to the Italian economy and its image.