Government ‘fails’ Inapa funding, says it will oversee insolvency process

On Monday, the Finance Ministry said Parpública, a public company that is a government shareholder, would not provide Inapa with the requested funding and would oversee the company’s already announced insolvency process.

Lusa contacted the Finance Ministry this Monday after Inapa declared insolvency on Sunday evening due to lack of funds. The company said it had made “all efforts in a timely manner” with creditors and shareholders, in particular its largest shareholder, the public company Parpública, to avoid the insolvency of the German subsidiary, but without this it will become insolvent in the coming days.

In response to Lusa, the Finance Ministry said that they only learned of the “critical situation” Inapa found itself in on July 11 (when the shares were suspended) and that was when they called in Parpublika, which explained that Inapa had requested an injection of 12 million euros for urgent treasury needs in the operation in Germany when it already had a request for 15 million euros for restructuring.

Given this information, opinions were sought from Parpública, the Directorate General of the Treasury and Finance (DGTF) and the Technical Unit for Monitoring and Monitoring the Public Business Sector (UTAM), Finance, which stated that the three entities had concluded that “the proposal did not meet firm conditions and did not demonstrate economic and financial viability that could guarantee reimbursement of expenses by the State.”

The Finance Ministry said that, given these opinions, the lack of a recovery strategy for Inapa (in which Parpública is not the majority shareholder) and the fact that the company has no “strategic activity for the Portuguese economy”, “confirm Parpública’s opinion not to continue with the financial operations requested by Inapa”.

“The government will monitor the bankruptcy process,” the ministry concludes.

The main shareholder of the Inapa group, founded in 1965, is the public company Parpública with 44.89% of the share capital, the company Nova Expressão has 10.85% and Novo Banco 6.55%. The remaining capital is dispersed.

According to the report and reports, the paper distributor (which also operates in the packaging and visual communications sectors) employed 1,478 people in 2023 and operated in 10 countries.

The company’s main production was carried out in Germany, where it acquired several companies in recent years. In 2023, this market accounted for more than 60% of the group’s revenue and employed 821 people.

France, where it acquired an important company in 2016, is the second country with the largest number of employees (330), followed by Portugal with 204 employees.

In 2023, the Inapa group made a loss of €8.0 million, compared to a profit of €17.8 million in 2022, with sales falling by 20% to €968.7 million.

When announcing its results at the end of April, the company linked the losses to a drop in demand for paper in Western Europe (-25%).

Quoted in that market statement, the group’s executive president, Frederico Lupi, foresaw a period of “enormous uncertainty and challenges” but believed the group had the capacity to respond, noting that measures were being taken that would make it “more flexible than before, giving you a better ability to respond to the different scenarios you may face.

After declaring insolvency on Sunday evening, the company today announced that Federico Lupi had resigned. Several administrators have also submitted resignations.