Vodafone, the world’s biggest mobile-phone company, is also looking at billing in a different currency “if the situation arises,” Chief Financial Officer Andy Halford said on a conference call on Thursday. Asked about the possibility of a Greek default, he said “it’s obviously something we’ve been having a close look at.”
The cash sweep by Newbury, England-based Vodafone shows how UK companies are trying to protect themselves against potential writedowns and losses in countries using the euro. Drugmaker GlaxoSmithKline started repatriating cash held in most euro-area banks early last year. WPP Finance Director Paul Richardson said yesterday that the biggest advertising company rounds up excess euros from its banks in Europe and moves them to the US where they are exchanged for dollars every day.
“What would happen if the guillotine were to come down?” Richardson said in an interview. “Everyone has had a very close look at in-country arrangements and people have taken legal advice,” he said, adding that WPP “feels reassured that we’re in as good a position as we could be if one of the countries had a massive writedown.”
Greece faces a 14.5 billion-euro ($19.3 billion) bond payment on March 20 and is struggling to secure financing to avert a collapse of the economy that could spark a new round of contagion in the euro. Greek Finance Minister Evangelos Venizelos heads to Brussels today after politicians failed to finalize new austerity measures needed to secure a 130 billion euro bailout package.
Talks stumbled over the issue of pension cuts and officials from the European Union and the International Monetary Fund gave Greece 15 more days to identify measures totaling 300 million euros.
GlaxoSmithKline, the UK’s largest drugmaker, moves “tens of millions of pounds” in cash every day out of banks in Europe into accounts in the UK, Chief Executive Officer Andrew Witty said on February 7.
“We don’t leave any cash in most European countries,” excluding Germany, Witty said. “Any cash that we bring in during the day gets swept out of the local banks into banks that we think are robust and secure.” [Bloomberg]