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| The Pfizer logo is seen at the company's U.K. commercial headquarters in Walton Oaks, Britain, Feb. 1. Reuters-Yonhap |
By Nam Hyun-woo
There is growing concern about Pfizer's possible exit from Korea as its local unit, Pfizer Pharmaceuticals Korea (Pfizer Korea), has begun a series of moves, including a capital reduction and office selloff, amid ballooning operating losses.
According to a Pfizer Korea audit, the company held a shareholder meeting Dec. 21 last year which voted for the capital reduction.
Unlike most troubled companies in Korea that lower their capital without refunding shareholders ― known as a nominal capital reduction ― Pfizer Korea stated that it compensated its shareholders, meaning a certain percentage of the capital was given to them based on the reduction rate.
Pfizer Korea's largest shareholder is PF OFG South Korea 1 B.V., having a 99.74 percent stake at the end of last year. PF OFG South Korea 1 B.V. is a Dutch-based company controlled by Pfizer.
Though the company did not reveal the amount, the company's capital is said to have declined significantly from the 12 billion won reported in the audit, because the shareholder meeting took place after the audited period ― Nov. 30, 2019 to Nov. 30, 2020.
Along with the capital reduction, Pfizer Korea stated that it sold its headquarters building and land in Jung-gu, Seoul, to an investment trust operated by GRE Partners, an asset management firm, Dec. 1, reportedly for 112 billion won. Pfizer Korea will lease back the office after the sale is completed.
Pfizer Korea's business has been scaled down in recent years.
In 2019, Pfizer headquarters announced a plan to divest itself from its off-patent drug franchise Upjohn. Consistent with this move, Pfizer Korea then spun off its off-patent drug business and set up Pfizer Korea Upjohn in May that year. As Upjohn merged with global generic drug maker Mylan and become Viatris, Pfizer Korea Upjohn was renamed Viatris Korea.
In March last year, Pfizer Korea also sold the assets and debts of its consumer healthcare business to GSK Korea.
The moves came amid Pfizer Korea's increasing operating losses.
According to the audit, Pfizer Korea's sales increased to 391.9 billion won last year, up 12 percent from 349.9 billion won in 2019. However, its operating loss expanded to 7.19 billion won from 2.83 billion won during the same period. Following this, the company swung to a net loss of 21.16 billion won in 2020.
Due to weakening profitability, Pfizer Korea's lowered the dividend sent to its headquarters. In 2017, the company paid 79.79 billion won in dividends, a 168.65 percent payout ratio, but reduced this to 12.48 million won in 2018, and has maintained that amount since then.
Pfizer Korea was unavailable for immediate comment.
