Sicomed takes $8m state-secured loan

Drugmaker Sicomed Bucharest will get a government guarantee for an $8 million loan, despite having been involved in a well-publicised spat with the Health Ministry in 2001. Sicomed halted production back then, because of the Ministry’s refusal to endorse the price increases requested by the drugmaker, which had applied new quality standards. The credit covered by the governmental guarantee is aimed at applying yet more quality standards. The government will secure 80% of a banking loan Sicomed is to take from the domestic market. The government’s unprecedented decision to secure a loan for a private company is explained by Sicomed’s need to implement the Good Manufacturing Practice (GMP) rules by yearend. Romania has committed to the European Union during the accession negotiations to have all the Romanian drugmakers enforce these standards by the end of 2003. Sicomed needs governmental guarantees because of the mounting debts in the healthcare system. Sicomed’s debts had come to total 530bn ROL ($16 million) by the end of Q1, higher than its share capital, which is certainly not to the liking of banks, even though Sicomed has to retrieve more than 730bn ROL ($22 million) from its clients (mostly hospitals and drugstores). ZF