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Grifols Bondholders Approve Singapore’s Billion-Dollar Investment

Grifols has assured that 87.93% of bondholders of its secured bonds, 81.01% of unsecured bonds, the required 93.82% of underwriters of its syndicated credit facility, and the European Investment Bank consented to the corporate reorganization that will accommodate GIC, Singapore’s sovereign wealth fund. Despite the significant financial injection, Grifols will continue to control all aspects related to the management of Biomat

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Almost one billion dollars from Singapore’s sovereign wealth fund will find its way into the coffers of the pharmaceutical company Grifols. The vast majority of the Catalan company’s bondholders and creditors have given their support to the operation, which will serve to reduce the firm’s debt.

At the beginning of the year, the company’s net financial debt stood at $7.3 billion (€6.2 billion) and the net financial debt to EBITDA ratio at 5.1x as a result of the acquisitions of plasma centers from BPL and Kedrion and the Gigagen transaction.

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The company has assured that 87.93% of bondholders of its secured bonds, 81.01% of unsecured bonds, the required 93.82% of underwriters of its syndicated credit facility, and the European Investment Bank consented to the corporate reorganization that will accommodate GIC, Singapore’s sovereign wealth fund. “The high percentage of consents obtained demonstrates the high degree of confidence of the main bond and debt holders in our long-term, sustainable business model, as well as in our commitment to reducing our leverage ratios, while we continue to value and take advantage of value-added opportunities, as evidenced by our strategic agreement with GIC,” explained the Catalan pharmaceutical company’s CFO, Alfredo Arroyo.

The investment from the Asian country will go to Biomat, the Grifols subsidiary responsible for plasma collection at 296 centers in the United States. The Singapore fund will control a total of 10 Class B ordinary shares in Biomat and nine Class B ordinary shares in a newly created sub-holding company. This will represent, directly and indirectly, a total of 23.8% of Biomat’s share capital.

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Despite the significant financial injection, Grifols will continue to control all aspects related to the management of Biomat and the operation of the centers. All the plasma collected at the 296 centers will continue to be supplied to Grifols for the production of plasma medicines under a long-term contract.

The Ibex-listed pharmaceutical company’s business continues to be based on plasma-based drugs. However, at the last shareholders’ meeting, the company began to unveil plans for other therapeutic areas and new drugs to diversify its business and reduce its dependence on donations. One of the spurs for this decision has been the pandemic, where confinements have weighed down the business model which until now has been Grifols’ flagship.

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(Featured image by cegoh via Pixabay)

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First published in elEconomista.es, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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Michael Jermaine Cards is a business executive and a financial journalist, with a focus on IT, innovation and transportation, as well as crypto and AI. He writes about robotics, automation, deep learning, multimodal transit, among others. He updates his readers on the latest market developments, tech and CBD stocks, and even the commodities industry. He does management consulting parallel to his writing, and has been based in Singapore for the past 15 years.