Green Cross to issue bonds for U.S. expansion

Green Cross Corp., a listed Korean pharmaceutical company, said Thursday that it plans issue three and five-year bonds worth some 100 billion won ($86 million) to finance its expansion overseas.

The company’s bond underwriter NH Investment & Securities will evaluate the value of the bonds graded AA minus through a book building process next week. Its bond issues mark the first time for the company to raise funds in the local capital market.

“The proceeds will be used for its expansion in the advanced pharmaceutical markets of North America such as the U.S., and to increase production of vaccines and plasma-derivative products at its plants,” a Green Cross spokesperson said.

The company is awaiting an approval for its plasma derivative IVIG-SN for the treatment of immune deficiency by the U.S. Food and Drug Administration. It filed for an FDA review late last year. After approval, possibly by the end of this year, Green Cross is expected to enter the U.S. early next year. It has mostly exported its therapeutic products to emerging markets in South America, Asia and the Middle East.

The company said that Green Cross had taken out bank loans for operations, in addition to financing its business from earnings. The company has 647 billion won in current assets, including cash and cash equivalents of over 54 billion won, with current liabilities, mostly bank loans, of some 267 billion won as of the end of last year, according to its audit filing.

Green Cross posted operating profit of about 10.9 billion won in the first quarter of this year, down about 14 percent from 12.7 billion won a year ago, on sales of 245.8 billion won, up 14.7 percent in the same period.

Green Cross Holdings is the biggest shareholder with a 50 percent stake in Green Cross, followed by the National Pension Service, the country’s pension manager, with about an 8 percent stake.


By Park Hyong-ki
(hkp@heraldcorp.com)