Ascendis Health said to mull further unit sales to cut debt
Ascendis Health, which is already considering an offer for its Remedica unit, is planning to sell other key businesses as it battles to service debt and ensure survival, according to people familiar with the matter.
The debt-laden maker of multivitamins, probiotics and nutritional pet supplements received an unsolicited offer for Cyprus-based unit Remedica in January, providing relief for the worst performing stock on the JSE last year.
Ascendis has now earmarked its bioscience division for an additional sale, said the people, who asked not to be identified as the deliberations are private.
The Remedica business has been valued by Ascendis at about $400m, compared with a 2016 purchase price of €260m, the people said. If the as-yet unnamed buyer agrees to meet this price, it would generate proceeds of more than double Ascendis’s current market capitalisation of R2.4bn.
The drugmaker didn’t immediately respond to a request for comment. On Wednesday, Ascendis said SA investment firm Legae Peresec has increased its stake in the company to 5%.
Under CEO Thomas Thomsen, Ascendis has started a review of its business to bring down total liabilities of more than R9bn. The company has R200m in outstanding payments in 2019 and about R4.4bn due in 2021, according to data compiled by Bloomberg.
The 2018 share slump has had implications for its largest shareholder, private-equity firm Coast2Coast Capital.
Its CEO Gary Shayne, along with his spouse and associated companies, have been forced to sell or transfer about R225m worth of Ascendis shares since November. Most of the disposals were triggered as the stock was used as collateral for loans. The company plans to release cash flow statements to lenders by the end of the month, one person said.
The stock has climbed 27% so far in 2019, compared with 2% on the benchmark FTSE/JSE Africa All Shares Index.