Centerpulse increases capital to fund settlement

Swiss medical devices firm Centerpulse is to issue SFr225 million ($170 million) in new stock to help fund a liability settlement in the United States.

This content was published on September 30, 2002 - 11:03

New shares will cost SFr140 each and shareholders will get two new shares for every 11 that they hold.

In a statement, the Zurich-based company said its biggest shareholder, InCentive Capital, would underwrite the capital increase by taking up to 78 per cent of unsold shares.

UBS will underwrite the remaining 22 per cent.

Faulty implants

The share issue is to help finance Centerpulse's $725 million share in a class action suit brought in the US over faulty hip and knee implants.

Tens of thousands of mainly elderly people were affected by the faulty implants, which also dented the company's image in the US and weakened its share value.

The liability settlement pushed Centerpulse - formerly known as Sulzer Medica - to an SFr1.19 billion loss in 2001.

But the company has fought its way back to profitability, recently posting first-half net profits for 2002 of SFr94.8 million.

Trading in the new stock will start on October 10.

swissinfo with agencies

Centerpulse summary

Centerpulse is to issue SFr225 million ($170 million) in new stock.
New shares will cost SFr140 each.
Existing shareholders will receive two new shares for every 11 they hold now.
The move is part of efforts to fund Centerpulse's share of a $1 billion class action suit in the US over faulty implants.
The implant problem, which arose in 2000, pushed Centerpulse to a loss of SFr1.19 billion last year.

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