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Spanish drug maker Grifols will bring in independent directors, chairman tells newspaper

Published 04/14/2024, 07:16 AM
Updated 04/15/2024, 01:06 AM
© Reuters. FILE PHOTO: The logo of the Spanish pharmaceuticals company Grifols is pictured on theirs facilities in Parets del Valles, north of Barcelona, Spain, January 9, 2024. REUTERS/Albert Gea
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MADRID (Reuters) -Spanish drug maker Grifols, battling a plunge in its share price this year, plans to add independent directors to its audit and compensation committees to improve its governance, its chairman said in a newspaper interview published on Sunday.

Grifols' market value has shed billions of euros since short-sheller Gotham City Research released three reports in early January accusing the company of overstating earnings and understating debt. Grifols has repeatedly denied the claims.

In a joint interview with CEO Nacho Abia in the Barcelona-based La Vanguardia newspaper - their first since the start of the crisis - chairman Thomas Glanzmann said appointing independent directors to the audit and compensation committees would allow the company to "continue to improve is governance".

Abia said Grifols also needed to simplify the way it explained itself to the market.

"We must work to reduce that complexity and increase the clarity of our explanations to the market, which is what allowed the Gotham report to raise these concerns," he told the newspaper.

Grifols said on April 10 it plans to meet its debt payments in 2025 with the proceeds of new senior secured notes and the sale of its 20% stake in Shanghai RAAS to Haier Group.

Glanzmann said there would there would be high demand for the company's bonds when the issuance is completed in one or two weeks.

"The number of institutional investors that have contacted us to participate has been extraordinary and says a lot about the market's confidence in the future of the company, in our growth and our ability to repay the debt,” he said.

Grifols wants to eventually buy back blood donation firm Haema AG and plasma donation company BPC Plasma, Abia said, having sold both to Scranton Enterprises, an investment vehicle linked to the founding Grifols family, in 2018.

© Reuters. FILE PHOTO: The logo of the Spanish pharmaceuticals company Grifols is pictured on theirs facilities in Parets del Valles, north of Barcelona, Spain, January 9, 2024. REUTERS/Albert Gea

"We have an option, very generous for Grifols, to buy these companies and we will exercise it. But (there is) no hurry," said Abia.

In its January report, Gotham City said that both Grifols and Scranton fully consolidate Haema and BPC Plasma in their accounts. Grifols has said it is required to do so because it holds a call option.

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