Karsten Wellner. Picture: FINANCIAL MAIL
Karsten Wellner. Picture: FINANCIAL MAIL

Foreign shareholders now hold more than a fifth of Ascendis Health’s shares, which have come under pressure amid concerns about its ability to grow organically and its debt levels.

"We’ve seen good interest from international investors," said CEO Karsten Wellner.

Foreign shareholders now hold nearly 22% of Ascendis’s shares, from just over 5% about 18 months ago.

Wellner said most parts of the business were showing strong organic growth, and share price declines were attributable to divestments by small and mid-sized investors in SA and to hedge funds taking short positions in the company.

Since reaching a high of R28.97 in September 2016, Ascendis’s stock has fallen to below R17. This week the group announced a R750m rights offer to pay off recent acquisitions.

When buying companies, the group defers about a third of the purchase consideration, usually for three years. Its deferred liabilities are now worth R1.4bn, more than half of which will be paid off via the rights issue.

"We’re not changing our business model but we’re slowing down on the bigger acquisitions," Wellner said.

Coast2Coast, whose stake in Ascendis has slipped from more than 50% when the company listed in 2013 to 27%, will underwrite the rights offer.

In a relatively unusual move, the rights offer is being priced at a premium of R20 per share.

"Coast2Coast believes the intrinsic value of the business is much higher than even the R20, and the liquidity of our share and other mid-cap companies is so low that you’d never be able to pick up the shares if they weren’t prepared to pay a premium," Wellner said.

He expected other shareholders to follow their rights, but said that if they did not, Coast2Coast’s shareholding would rise to about 34%.


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