Grifols stands as much as Gotham’s accusations: it defends its accounting and accuses the agency of eager to decrease the value | EUROtoday

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The entity justifies the consolidation of the subsidiaries questioned by Gotham in its explosive report

Grifols headquarters
Grifols headquartersAlejandro GarciaEFE
  • Ibex Gotham City costs Grifols for manipulating its accounts and shares plummet on the inventory market

Grifols has issued a brand new assertion wherein it defends its accounting earlier than him explosive bearish agency report Gotham City Researchwhich considers that the worth of its shares “tends to zero” and the value of the Catalan firm has plummeted.

After stating that the doc printed by Gotham earlier than the market opening was “false information”, the corporate has printed a extra detailed protection wherein it justifies the accounting facets denounced by the bearish agency, which has already recorded a revenue of 20 million euros for the operation.

Specifically, the majority of the doc focuses on the Biotest and Haema subsidiaries and confirms that Grifols’ monetary experiences are supervised by the CNMV and the SEC, its American counterpart.

“Each and every one of these transactions since 2018 have been recorded in the company’s books and in its public accounts, both presented to the Spanish regulator and in the 20-F form presented to the SEC in the United States, so there is no “no new info that may be thought-about hidden,” the company concludes in its analysis.

The fall in shares has moderated again after the publication of the response of the family company, which Even so, a fall of almost 26 was recorded%, but it recovers 15 points from the 40% collapse it suffered at the opening of the negotiation.

“The firm doesn’t perceive the completely different interpretation made by Gotham City Research until the one factor it intends, as a short-term fund that it’s, is to decrease the share value as they themselves mirror on web page 2 of their report, to acquire advantages”, states the reply of the Catalan company.

Debt struggle

Gotham City’s thesis is that Grifols has used the family business Scranton Enterprises to double-count the profits of two of its subsidiaries, thus reducing its debt ratio.

The crux of the matter is the purchase and sale of two subsidiaries in 2018: Haema AG y Biotest US Corporation. Grifols acquired them and they were later sold for the same price to Scranton Enterprises in a contract that includes a loan from the blood products group holding with 95 million dollars and another loan of 360 million dollars with financial entities.

Despite not directly controlling these companies, Grifols has a service contract through which it operates its centers and records their entire earnings, something the Scranton branch also does. This motivates Gotham’s complaint, which suggests that this double accounting makeup the group’s debt ratios, which will go from 6 times Ebtida to 13, which would considerably reduce the stock market value of the share.

For its part, the Catalan company indicates that its auditors recognize that it has the right to consolidate these income by having an option to repurchase both Biotest and Haema at an appraised price and that, it is taken for granted, that, in the event of any difficulty on the part of Scranton, it would take control of the company. To reinforce their argument, they assure that the CNMV requested additional information about this agreement and this was sent on January 14, 2019, without subsequent objections from the supervisor.

The company has also announced that it will issue a new report in which it will answer the doubts raised by Gotham about the business to continue defending its interests. The Grifols Board of Directors also meets this afternoon to analyze the group’s situation, according to Reuters.