A bad week for Sulzer Medica and Swissair
It has been a bad week for Sulzer Medica, which learned that it was facing yet more lawsuits in the United States over its recall of faulty hip and knee joints. Swissair's fortunes also continued to decline amid continuing problems at its partner airlines in France and Belgium.
Winterthur-based Sulzer Medica said on Monday that it had been named as a defendant in more than 800 lawsuits filed over faulty artificial hip joints in the United States.
It said more than 1,900 people have now had to undergo revision surgery for the faulty hip implants, which were recalled last December.
The company also revealed that a substantial number of people might need revision surgery in connection with a separate problem with a plate used in knee operations. The share price tumbled on the news.
Swissair’s stocks also took a hammering this week, hitting eight and a half-year lows, after the international business rating agency, Moody’s, downgraded its rating of Swissair.
Moody’s said in a statement that the move reflected the increased costs that Swissair was likely to face when it severed links with partner airlines in France and Belgium.
On Tuesday, a commercial court in Paris placed the French airline, AOM/Air Liberté, under protection from creditors for the next three months, staving off the threatened closure of the troubled company.
Its two main shareholders, Swissair Group and France’s Marine-Wendel, failed to agree to raise the money needed to keep the company afloat.
Later in the week, the Belgian Government, which owns 50.5 per cent of Sabena, said it expected Swissair to honour a commitment to increase its 49.5 per cent stake in the carrier to 85 per cent.
Swissair is trying to wriggle out of the agreement because it has its own massive losses to deal with – SFr2.9 billion last year.
In other news, Switzerland’s biggest bank UBS announced it is to buy the pension management arm of Royal Bank of Canada for SFr406 million as part of its expansion in North America.
The purchase of RT Capital, which works out at $230 million, is small compared with UBS’s $11.8 billion acquisition of US broker PaineWebber last year.
by Tom O’Brien
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