Cochlear Ear Implant Recall Costs May Reach $150 Million

Cochlear Ltd., maker of the world’s best-selling ear implant, said costs
from a voluntary recall of one of its hearing devices may reach A$150
million ($152 million). Of 20 cochlear-implant surgeons surveyed globally, 85 percent indicated
Cochlear’s reputation was little or untarnished by the recall, Nomura
Holdings Inc. wrote in a report today. Rather than switch to an alternative supplier, surgeons have instead used Cochlear’s CI24RE implants.
The company plans to fund the cost of the recall
with cash, and increased a loan facility with Westpac Banking Corp. by
A$50 million in case additional funding is needed to maintain the
current level of dividend. More details of the cost of the recall will be announced in February,
when the company reports first-half earnings. Items
related to the recall will be accounted for in the period ending Dec.
31, 2011.