Grifols has not convinced the market after the meeting that its key executives held this Thursday with financial analysts to defend themselves against the Gotham City Research report debt. The president of Grifols, Thomas Glanzmann, has denied all allegations, but has not provided any relevant evidence to support this denial. At least the market understood that and immediately after the end of the conference punished the opening price severely with slight increases at the opening of the stock exchange. However, at the close of trading this Tuesday, Grifols shares fell by 16.17% to 9.90 euros.
Glanzmann announced that the National Securities Market Commission (CNMV) has given Grifols 10 calendar days to resolve a number of issues regarding its financial condition following the Gotham report. Yesterday, the market regulator sent a query to the company raising a number of issues that Grifols declined to elaborate on. “We will respond as quickly as possible,” said the manager, who has chaired the pharmaceutical company for a year. The president of the CNMV, Rodrigo Buenaventura, announced last Tuesday, as soon as the pessimistic fund report emerged, that the organization would “exercise its powers to clarify the situation”. “It makes no sense to question the quality of Grifols’ audited financial statements or to ignore the information published this morning. We will integrate them into our processes. “We have contacted the company and will be in touch in the coming days to obtain further information with the aim of clarifying the matter,” he said afterwards.
Scranton's role
The ultimatum given by the CNMV was one of the few relevant data that Glanzmann presented in his meeting with analysts. Regarding Gotham's main complaint that Grifols used the Netherlands-based investment company Scranton Enterprise to conceal its debts, Glanzmann clarified that this company is not just a Grifols family office, as the fund claims , because “there are 22 investors and only three are members of the Grifols family, which owns 20% of the company.” The other admitted context is that Scranton is the landlord to whom the pharmaceutical company pays rent for its headquarters in Sant Cugat del Vallés (Barcelona) pays. In 2018, the Catalan pharmaceutical company sold to Scranton two blood plasma center companies (Haema and BPC) that it had purchased just a few months earlier, but continued to consolidate both companies in its accounts to increase its gross profit (Ebitda). and reduce the debt ratio.
Despite all this, Grifols executives have told analysts that they have no plans to change their relationship with Scranton or exercise the purported buyback option for BPC and Haema. Financial manager Alfredo Arroyo estimated the contribution of the two companies surveyed by Gotham to EBITDA at 30 million, or 2% of the total. It has also not disclosed details of its plans to refinance its high debt of more than 8,000 million, apart from using the 1,600 million it will receive from the sale of 20% of Shaghai Raas to Haier. Regarding this operation, they stated that “there is no risk” and they hope to complete the transaction as planned in the first half of 2024.
Grifols executives have used the meeting with analysts to attack Gotham again, accusing it of using information in a biased or false way just to make money. An accusation that has not stopped the fund from denouncing again, via the X network, that both Grifols and Scranton continue to consolidate BPC and Haesma in their accounts in order to fatten their accounts.
Follow all information Business And Business on Facebook and Xor in our weekly newsletter
The five-day agenda
The most important business quotes of the day, with the keys and context to understand their significance.
RECEIVE IT IN YOUR EMAIL