INTERNATIONAL TRADE

‘Capitalism in Action’: SPI Stock Distributed to Belgrade Workers

ICN Galenika, a joint venture between SPI Pharmaceuticals Inc. of Costa Mesa and Yugoslavia’s Galenika Pharmaceuticals, began distributing 1.2 million shares of SPI stock to its 5,300 employees in Belgrade this week.

The stock distribution, which was part of the joint venture agreement between the companies, represents about 7% of SPI’s common shares.

“We hope this will be a model that other businesses will follow, because it provides the type of popular incentive to stimulate economic transformation in Yugoslavia and other Eastern European countries,” ICN Pharmaceuticals Inc. Chairman Milan Panic said in a statement Wednesday. SPI is a subsidiary of ICN Pharmaceuticals.

“This isn’t theoretical economics, but real-world capitalism in action,” he added.

The shares, worth about $34.5 million based on the Dec. 13 closing price, will be completely distributed by the end of this week, said Jack Sholl, SPI’s spokesman.

The cost of the venture has more than doubled for SPI since it was first announced Nov. 23, 1990, when SPI’s stocks traded for $11.375 a share on the American Stock Exchange. Last Friday, SPI stock closed at $28.75.

ICN Galenika--which is 75% owned by SPI, with the remainder owned by Galenika--is issuing 203 shares, worth about $5,836, for each employee.

Under the agreement, Sholl said, ICN Galenika employees can immediately sell 10% of their shares in the open market, up to 20% within six months and another 30% within two years. The remaining 40% can be sold in the third year, he said.

“We’ve asked the employees whether they want to sell any of their shares now, and a large majority of them have indicated that they prefer to hold onto their shares,” Sholl said.