Grifols shares soar on possible sale of $1.5 bln stake in Shanghai RAAS (updated)

China Cinda Asset Management

14/06/2023 09:52

(Adds analyst comment in paragraph 6, details on Grifols debt
and recent strategy in paragraph 7,8, SR shareholder structure
in 9)
       MADRID, June 14 (Reuters) - Shares in Spanish
pharmaceutical Grifols  GRLS.MC  soared on Wednesday morning
after it disclosed a plan to reduce its stake in Shanghai RAAS
 002252.SZ  in a deal that would bring in $1.5 billion.
    Shares in Grifols, which produces drugs made out of blood
plasma, were up 8.0% in morning trade after the company
announced it was planning to change the shareholding structure
in the Chinese company, of which it owns 26.20%.
    Grifols would receive $1.5 billion if the deal goes ahead,
the Spanish company said, without disclosing a buyer. 
    Grifols added it would keep a 'significant stake' in
Shanghai RAAS, whose market value is 47.34 billion Chinese yuan 
($6.61 billion).
        China is Grifols' third-biggest market by revenue. 
  
    Brokerage CM Capital Markets said that if confirmed the sale
would allow Grifols to reduce its debt and would boost its
shares.
        
    Grifols' net financial debt
     stood at 9.3 billion euros in the first quarter of the
year, slightly above the 2022 levels and equivalent to seven
times earnings before interest, taxes, depreciation, and
amortisation (EBITDA). The company's target is to lower the debt
to a ratio of four-to-one by 2024. 
  
        The company was hit at the start of the pandemic as
plasma collection was restricted, sending its share price down
by two-thirds from its early 2020 levels.
  
        Since then it has sought to reassure investors with 
    cost-cutting measures
     and a 
    leadership change
    . 
  
        Grifols is the main shareholder in Shanghai RAAS,
followed by RAAS China with a 4.65% stake, China Cinda Asset
Management with a 4.14% stake and Hwabao Trust with a 3.98%
holding, according to Refinitiv data.
  
         
  
    ($1 = 7.1615 Chinese yuan renminbi)
  

 (Reporting by Matteo Allievi and Emma Pinedo, additional
reporting by Tomás Cobos, editing by Inti Landauro)
 ((matteo.allievi@thomsonreuters.com;))