Aspen reviews operations after share plunges on debt concerns
Aspen Pharmacare is reviewing its SA and European businesses as part of its plans to slash borrowings, CEO Stephen Saad said on Friday, as the group’s shares more than halved on concerns that it had taken on too much debt during its acquisition spree. The global pharmaceutical company’s shares plunged as much as 51% to R68.99 in just two hours — the biggest intra-day fall yet and the stock’s worst level in about nine years. This was after Aspen said normalised headline earnings in the six months ended December fell 9% to R3.6bn as higher financing costs ate into profits. Revenues edged 1% higher to R19.7bn. The biggest concern to investors was that borrowings, net of cash, increased by R6.7bn to R53.5bn. This was partly because of the weaker rand, since debt is largely denominated in euros, as well as deferred payments for acquisitions of R4.9bn and capital expenditure of R1.5bn. “Borrowings, we believe, have peaked now,” deputy CEO Gus Attridge said on Friday. Aspen was “over the h...
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