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Sulzer boss says spinoff is going according to plan

Sulzer CEO Fred Kindle sees no reason to delay Medica spinoff Keystone

The chief executive of the Sulzer corporation in Winterthur, Fred Kindle, has said he sees no reason to postpone the spinoff of Sulzer Medica. The medical division is in the throes of a costly recall of hip replacement parts and has also been beset by problems with its knee implants.

In an interview with the Swiss financial newspaper, “Finanz und Wirtschaft”, Kindle also said any possible exposure of the parent Sulzer concern to damages claims against Sulzer Medica would be “very small”.

Asked if the scheduled split-off date of July 10 for Sulzer Medica, in which Sulzer owns 74 per cent, was in jeopardy, Kindle said: “Not from our point of view. Until now, nothing has called this date into question.”

Medica shares have fallen sharply on the recall news and the plunge has also undermined Sulzer stock, partly because of the view that it eroded the value of Sulzer’s stake in Medica, but also because of concerns about legal costs.

Medica’s recall of faulty hip implants and their replacement with new parts has led to 1,900 cases of revision surgery and prompted more than 800 lawsuits, mainly in the United States.

The company has indicated that is not fully insured for the consequences of the recall, with analysts estimating the final cost at up to SFr1 billion ($570 million).

Sulzer has said it could not be held liable for the problems at Medica since the two companies are legally fully separate. It has also cited an agreement waiving responsibility of one company for the other’s action.

Kindle told Finanz und Wirtschaft: “Our legal advisers rate the probability of Sulzer being liable as very low.”

swissinfo with agencies

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR