Greece's government is up in the air. Italy's prime minister is rumored to be resigning. Even France is cutting its budget to protect its credit rating from eurozone fallout. So it's not much of a surprise that a drugmaker would be taking financial measures to weather the crisis.
Mindful of a potential credit crunch, Bayer has increased its buffer of liquid assets to €3.8 billion, or more than $5 billion, the newspaper Boersen Zeitung reported over the weekend. CFO Werner Baumann told the paper the company normally keeps about €800 million, or $1 billion, in liquidity available. The company plans to hang onto the higher amount till April, when a €2 billion bond comes due, Baumann said.
Besides the potential effects on the credit markets, the eurozone crisis represents another threat to Bayer, as well as other pharma concerns. Public health systems have been increasingly slow to pay their drug bills, putting drugmakers in a tough position. Greece's hospitals have been most delinquent, but unpaid invoices are common in Spain and Italy, too.
"We have unacceptably high levels of outstanding bills in the public sector," Baumann told the German paper. Those unpaid bills total somewhere in the "significant three-digit-million euro range."