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Sanofi and Fresenius asked to take writedowns under Greek debt plan

By Gareth Macdonald , 08-Mar-2012
Last updated on 08-Mar-2012 at 11:48 GMT

The Greek government has asked several drugmakers to accept losses on bonds originally issued to cover unpaid bills.

According to reports by Reuters and Bloomberg German manufacturer Fresenius and French firm Sanofi have been asked to take financial write-downs as part of the country’s efforts to restructure its crippling debts.

Fresenius spokesman Matthias Link confirmed that his firm – along with several other healthcare companies - has been asked to take the write-down, but told in-Pharmatechnologist.com that: “It is not such a big deal from our side.

He explained that the loss had been already factored into the firm’s 2011 results – published last month – and would have no impact its 2012 financials or guidance.

A Sanofi spokesman told Smallcapnetwork.com that: “it still holds some Greek bonds [that]… are eligible for the PSI scheme [the ‘private sector involvement’ restructuring plan ] and the company has received an official invitation from the Greek government to participate in that deal.

Impact on Pharma

The news coverage follows just a few weeks after the Hellenic Association of Pharmaceutical Companies (SFEE) issued dire warnings about the potential impact Greece’s debt restructuring could have on drugmakers.

In a statement published on February 14 the SFEE said: “Debts accumulated at IKA [Social Security Organisation in Greece] and military hospitals have reached explosive levels, coming close to €0.5 billion. SFEE is sounding a note of warning that, unless the government addresses the problem very soon, the supply to these institutions with pharmaceuticals will be in immediate danger.”

The organisation explained that - based on a survey of members – the IEK owed €343m at the end of 2011 and military hospitals had debts of more then €100m.

SFEE president Dionysios Filiotis said: “The accumulation of new debts, on top of past debts which in the context of the PSI are at risk of not been paid after all, will spell catastrophe, and it is quite probable hundreds of pharmaceutical companies and firms in the healthcare sector in general may already be facing the spectre of going out of business.

The bonds that the government issued to pharmaceutical companies in settlement of their overdue claims are currently at risk of becoming worthless. We are sending a distress signal and appeal to the government for an effective solution to the problem before it is too late.”

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