LONDON, Feb 7 (Reuters) - GlaxoSmithKline Plc, Britain’s biggest drugmaker, has been sweeping cash on a daily basis from euro-zone banks in a bid to protect itself from potential problems in the single currency bloc, its chief executive said.
“We don’t leave any cash in most European countries,” Andrew Witty told reporters after presenting fourth-quarter results on Tuesday.
“We sweep all of our cash raised during the day out of the local banks and send it to banks here in the UK which we think are robust and secure.”
The system has been in place since early last year and involves the movement of “tens of millions of pounds” in cash each day, he added.
In recent months, many business leaders have started to contemplate the possibility of a break-up of the euro, even though this is still viewed as unlikely. For non-financial firms, a key focus is on safeguarding cash and ensuring cash deposits are in the safest possible banks.
The pharmaceuticals industry has already been hit hard by the crisis in the euro zone, which has seen a number of southern European governments slashing prices for medicines. Drug manufacturers also face a growing problem of unpaid bills.
In the case of Greece, drugmakers have been forced to accept government bonds instead of cash for some outstanding debts. Those bonds were either sold immediately at a discount or are still sitting on the companies’ books at even lower value today.