GSK repatriating funds daily from European operations

GlaxoSmithKline (GSK) is remitting funds out of the eurozone countries on a daily basis in a bid to protect itself in the event of the region being hit by banking and liquidity crisis.

According to Sir Andrew Witty, chief executive, GSK, early last year the company had started remitting "tens of millions of pounds" in cash every day out of most eurozone countries into accounts in Britain.

He said the company is not leaving any cash in most European countries and any cash it raised during the day was being swept out of local banks into banks it thought were robust and secure in Britain. He said in such situations one had to do the best to actively manage risks.

Drug makers have been hurt by price cuts in the eurozone as cash-strapped governments curbed their drug bills, and also because of failures by countries to pay their debts.

He added that Glaxo had been reducing its risk over the past two years through "a huge focus on getting paid" by the hospitals it sold to in Southern Europe, thus reducing its debts in the region.

He stressed that action taken by the European Central Banks had had a very positive impact on bank liquidity and confidence and he did not think the end of the world was near. However, Glaxo would not stop repatriating cash.