Pharmacist griffles To defend himself, he hides behind the fact that all his accounts are audited by the consulting firm KMPG Charges from bearish fund Gotham City Research, which pointed out in a report that the company was using its holdings to hide the real debt the group had transferred to the market, and categorically stated that its “shares are worth zero.” The Catalan group has written to the National Securities Market Commission to refute the conclusions reached by the fund that uncovered the Gowex financial scandal a decade ago.
“Each of these transactions since 2018 has been recorded in the company’s books and public accounts, submitted in form 20-F filed with both the Spanish regulator and the United States SEC, so there is no new information it can be considered confidential,” the group assures. “The company doesn’t understand Gotham City Research’s different interpretation unless it’s just their intention to do so.In the note sent to CNMV, it is stated that “as a short-term fund or to gain benefit by decreasing the share price, as they themselves reflect on page 2 of their report.” The company stated that it will issue another bond. In the report published by Gotham City Research regarding the acquisition of other companies, Reference is made to the mentioned business aspects.
The document presented by the fund is devastating for the Catalan community, which is accused of manipulating its accounts and hiding part of its debt; These accusations were completely denied in a note sent by the group to the CNMV. The regulator told ‘actives’ this Tuesday that it had analyzed the Gotham City Investigation report on Grifols and was also reviewing what the pharmaceutical company said. “Collecting the right data”. The head of the CNMV stated that he will not suspend the listing of the company for now. Minister of Economy Carlos Body stated that “we need to act cautiously” at the moment and wait for the instructions of the CNMV.
Leverage higher than declared
Fund points to Grifols transferring investors leverage six times its ebitda (profit before tax and depreciation) and the company, which is valued at around 9 billion 540 million euros, actually has a debt of 10 to 13 times its EBITDA. Gotham City Investigation document reveals that both the Grifols and Scranton Holding company The financial statements of the family that owns the pharmaceutical company, which owns 8.4% of the company, are misleading to investors regarding their financial statements. “If our estimate of Grifols’ debt is correct, the company will face much higher financing costs than what it transfers to the market. We believe that these shares should not be invested and their real value is close to zero,” the report strongly states.
Gotham believes Grifols concealed debt by consolidating the acquisition of two companies, BLP Plasma and Haema, in its financial statements. “These two companies are very important for Grifols because they represent approximately 40% of the profits from non-controlling shares.”, the report says. Additionally, Grifols provided Scranton with a $95 million loan in 2018, a transaction tied to the acquisitions of BPL Plasma and Haema. “However, this loan does not appear in Grifols’ documents and appears only in Scranton’s documents,” the document explains.