Grifols will pay 70 million mandatory annual dividend to the Singapore fund
Grifols has revealed the conditions of the agreement for the entry of the sovereign fund of Singapore GIC in the capital of a subsidiary. In this agreement, the Catalan multinational will have to pay 79.2 million dollars (69.5 million euros) annually to its partner on a mandatory basis.
GIC reached an agreement with Grifols last month to invest 990 million dollars (835 million euros at current exchange rates). It enters as a partner through the American subsidiary Biomat, of plasma collection centers. Now Grifols details in the semi-annual financial report presented yesterday to the CNMV that the Asian fund will thus control 23.8% of Biomat's capital.
The operation is structured by delivering to GIC ten ordinary class B shares of Biomat and another nine of a newly created company. These titles will not have the right to vote, but they will have “preferred annual dividends”, explains the Catalan laboratory to the CNMV.
Specifically, it will pay a dividend of 4.17 million dollars per year for each share, which represents a total of 69.5 million euros. In this way, the Singapore fund obtains remuneration for the capital contributed to the company listed on the Ibex 35.
Grifols also acknowledges that as of 2023, the sovereign wealth fund will be able to sell one share each year to the Biomat company itself, if it so wishes, thereby granting the Asian investor a means of liquidity. As of the fifteenth year of the agreement, GIC will be able to divest itself of all the participations that it maintains at that date in Biomat. It may also liquidate the shares at any time if Grifols ceases to have control over that US subsidiary.
Biomat has a network of 296 plasma collection centers in the US Grifols will continue to control all aspects related to the management of the subsidiary and the operation of the centers. All the plasma collected in these facilities will continue to be supplied to the Spanish company for the production of plasma drugs through a long-term contract.
This operation will serve Grifols to reduce its liabilities, since it has promised to gradually reduce its leverage. GIC is one of the world's largest sovereign wealth funds with more than $100 billion in assets under management. Asian investment comes at a crucial time because Grifols accounts have suffered due to difficulties in obtaining plasma during the pandemic.
The company has maintained a strategy of expanding its network of plasma centers in recent months, with purchases in the US and entry into Egypt, and plans to continue with this acceleration. If in 2021 it reaches 380 points (double that of 2016), next year the number will reach 450 and in 2026 it will be 520 (36% more).
Precisely, the laboratory reported yesterday that it improved its results in the first half despite the difficulties in capturing plasma in its centers in the US. The plasma derivatives company earned 266.8 million euros, 22.3% more, since that last year the profit reflected a negative impact due to the pandemic.
