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ICN Expects to Take Charge on Yugoslav Debt

July 16, 1998|BARBARA MARSH | TIMES STAFF WRITER

Government turmoil in Yugoslavia is costing ICN Pharmaceuticals Inc. a bundle.

The Costa Mesa drug company said Wednesday that it expects to take a special noncash charge of $172 million, or $1.65 a share, after a government agency defaulted last month on payments for drugs.

ICN has been selling drugs on credit to the Yugoslav government--its biggest customer there--and said it's trying to work out new terms.

The company has suspended sales on credit to the government until the problem is resolved and will sell on a cash basis only. The company said the government's financial situation is affected by international economic sanctions, the costs of waging war and the devaluation of its currency last spring.

ICN officials took the action after a government agency failed to pay $39 million due June 30 and the government sought concessions on other debt. The charge covers expected losses of $160 million the government and related agencies owe the company and about $12 million for the write-down of ICN investments in health-care-related businesses in Yugoslavia.

ICN Chairman Milan Panic, a Yugoslav native who briefly served as its prime minister, is involved in the credit negotiations.

Trading was halted in ICN shares late Wednesday after the stock sank $4.50 on the New York Stock Exchange, to $38.63. The firm announced the write-down after the market closed, but Randy Meier, ICN's senior vice president, said the stock "took a pretty good hit on speculation of what it would do today."

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