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AFLAC Loses $257 Million On Parmalat Stake

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NU Online News Service, Dec. 18, 2003, 3:49 p.m. EST – AFLAC Inc., Columbus, Ohio, says it has sold its investment in Parmalat Finanziaria Societa per Azioni, Collecchio, Parma, Italy, a dairy company that has been having problems with making debt payments.[@@]

The sale will reduce AFLAC fourth-quarter net earnings by $257 million, the company says.

“We closely monitored financial developments at Parmalat over the last week and concluded that Parmalat no longer met the profile of investments we want to retain in our portfolio,” AFLAC Chief Investment Officer Joseph Smith Jr. says in a statement about the sale. “We are certainly not pleased to be realizing a loss on this investment. However, this action is consistent with our investment approach. We purchase only investment-grade securities, and, in the event that a security is downgraded to below-investment-grade, we undertake a thorough credit review to determine if we will continue to hold the investment.”

The sale of the Parmalat stake demonstrates that AFLAC remains focused on a conservative investment approach, Smith says.