Grifols will report an unexpected accounting adjustment as a result of the sale of its 20% stake in Shanghai Raas. According to Bloomberg, the lab booked 400 million euros more than it should have to reflect the value of the asset owned by the Chinese firm. Likewise, the adjustment, which will be announced on Tuesday, will not affect its second-quarter results. The company itself, in the relevant information submitted to the CNMV, acknowledged the “incorrect application of an accounting procedure” attributable to Shanghai Raas.
This discrepancy in the accounting of reserves was discovered by its new auditor, Deloitte. His name was released this year after allegations Gotham City Research manipulated his accounts through the Scranton family car. It should be noted that it came to audit his books, replacing KPMG.
On hearing the news, the CNMV “cautiously” suspended Grifols’ listing on the stock market. The company’s shares have reversed course this morning. transition from a calm session to a huge drop of up to 5.5%. The shares recovered shortly after and fell only 1.8%, remaining at 8.93 euros per share. It should be remembered that the company will present its results at the close of the market. There will be a press conference with analysts at 6:30 p.m.
In June 2024, Grifols finally closed the deal to sell 20% of Shanghai Raas to the multinational Haier. Specifically, he sold it for 1.629 million euros. He was going to use this money to reduce his debt (at that time it was 9.811 million). This is one of the key transactions.
According to the laboratory,The parties agreed that Grifols would retain an independent director on the board of directors of the Chinese firm.The existing exclusive contract for the distribution of human serum albumin in the Chinese market was also amended to set its term for an initial period of one decade, with the possibility of extension for an additional 10 years, with guaranteed minimum supply volumes for the period 2024-2028.
Except, Both Grifols and Haier have agreed not to transfer any of their shares for three years after the deal closes.nRegarding Grifols’ 6.58% stake in Shanghai Raas, Grifols has granted Haier voting rights for 10 years and a right of first refusal should Grifols propose to transfer the shares to a third party.
On the other side, Gotham City Research has once again focused on this issue on its X (formerly Twitter) account.. The bearish firm shared the news. The company had not posted anything on social media for two weeks when it announced Moody’s decision to withdraw Grifols’ ratings due to a lack of information about the Brookfield takeover bid.
New auditor for Grifols finds discrepancies in non-cash accounting pic.twitter.com/AytEDxtMSn
— Gotham City Research (@GothamResearch) July 30, 2024