Valeant Thinking About Plane Purchase on Account of Increased CEO Travel

Valeant Thinking About Plane Purchase on Account of Increased CEO Travel - Image via Wikipedia

A report published by the Wall Street Journal from Toronto states that after the merger with Biovail Corp, Valeant Pharmaceuticals International has decided to buy a corporate jet. 

Canada based Biovail had owned a plane for a number of years but as the company has been known to be cost conscious it did a leaseback transaction for that plane which is a Falcon 50. 

The jet was purchased by the company from the company’s outspoken founder Eugene Melnyk in what was termed as an arm’s length transaction. He has been critical about the merger between the two companies. 

 He said that the merger has happened because of financial reasons and it has happened purely to cover each other’s misguided strategies. 

According to Laurie Little, who is a spokeswoman for Valeant Michael Pearson – the company’s chief executive has been traditionally flying commercial. 

Since the time required for the job has increased dramatically on account of travel to Barbados, Latin America, Poland and Canada has made them think about retaining the existing plane or whether they should purchase a new one. No decision has yet been taken. 

The chief executive is relocating to Barbados so that low corporate tax benefits can be used. The company has manufacturing plants in Canada, Mexico, Brazil, and Europe. 

The sixteen passengers Gulfstream G500 is one of the planes that the company is looking at. Its cost is around thirty-five to forty million dollars. 

The main reason for the merger to take place is the savings that would be made. Most savings will be in the form of R&D cuts and a steep reduction in general expenses.