BY AGENCIES
GLAXOSMITHKLINE is clearing cash out of eurozone countries on a daily basis to protect itself against a potential banking and liquidity crisis in the region.
Sir Andrew Witty, chief executive of Britain's biggest drug maker, said that early last year the company had started emptying "tens of millions of pounds" in cash every day out of most eurozone countries into accounts in Britain.
GlaxoSmithKline
"We don't leave any cash in most European countries. We sweep any cash we raise during the day out of local banks into banks we think are robust and secure," he added. "You do your best to actively manage the risk."
Drug makers have been hurt by price cuts in the eurozone as cash-strapped governments curb their drug bills, as well as failures by countries to pay their debts.
But Sir Andrew said that Glaxo had been reducing its risk over the past two years through "a huge focus on getting paid" by the hospitals it sells to in Southern Europe and it had been able to reduce its debts in the region.
He stressed that action taken by the European Central Bank's had made "a very positive effect on bank liquidity and confidence" and he did not think "we're one step away from the end of the world". But Glaxo has no plans to stop repatriating cash.
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