Ascendis shares bounce as forced sales slow
Private equity firm Coast2Coast has been offloading the company's shares to meet margin calls
The share price of Ascendis Health, the JSE’s worst performer in 2018, rebounded over the past two weeks since anchor shareholder Coast2Coast said it was putting measures in place to halt damaging forced sales of the company’s stock. Private-equity firm Coast2Coast, which listed Ascendis in 2013 and then pledged some of its shares as collateral for bank loans, has been a heavy seller of the health-care company’s stock in recent months. The sales have been involuntary as Coast2Coast has failed to meet margin calls from banks, which were triggered by a falling Ascendis share price. When facing a margin call, a borrower must either deposit more money into the loan account or the bank will sell some, or all, of the shares it holds as security. The forced share sales compounded a sell-off linked to concerns about Ascendis’ tepid organic growth rate and high debt levels. By December 12, the company’s share price reached a record low of R3.26. Just a year before, Coast2Coast had forked out...
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