ASCENDIS Health received the nod from shareholders to proceed with a proposed restructuring of the group that has avoided placing the company’s South African assets in business rescue. The approval paves the way for the implementation of the transaction to settle debt of approximately €444 million (R7.7 billion) owed to senior lenders.
Ascendis said 98.5 percent of shareholders voted in favour of the recapitalisation, exceeding the required 75 percent threshold. Shareholders representing over 47 percent of the company’s issued shares voted at the general meeting.
Shareholders also supported the transactions for the disposal of the Animal Health and Respiratory Care Africa (RCA) businesses.
Chief executive Mark Sardi welcomed the strong vote of confidence from retail and institutional shareholders following months of negotiations with the senior lenders.
“We now have the required mandate from our investors and will implement plans to unlock shareholder value in the ‘new’ Ascendis Health in the shortest time possible.”
The ‘new’ post-recapitalisation Ascendis Health will comprise three local businesses, namely Medical Devices, Pharma and Consumer Health.
Ascendis said following the approval of the transaction, certain of the group’s assets will now be transferred to the lenders in exchange for existing debt obligations. The lenders will provide new debt facilities to the group.
The lenders will take 100 percent ownership of Remedica (Cyprus) and Sun Wave Pharma (Romania).
They will also receive the net disposal proceeds from the sale of Animal Health and RCA.
The lenders will provide a two-year loan facility to Ascendis Health of €15m and a new loan facility of €20m to fund remaining transaction costs, head office restructuring costs and working capital requirements. The facility will provide liquidity to optimise the value of the ‘new’ Ascendis Health.
Ascendis Health has also shared in the upside on the disposal of Farmalider, together with exclusive access to Farmalider’s product portfolio.
“Our Pharma division will gain access to all Farmalider products, 40 of which have been identified for commercialisation. This licensing agreement grants the Pharma division indefinite and exclusive access and rights to market Farmalider’s portfolio of products for 14 Southern African Development Community countries (including South Africa) and 11 other African countries,” Sardi said.
Last week, Ascendis Health posted a R1.6bn after tax loss from continuing operations during the year ended June 2021.
The group said rising debt levels, restructuring costs and higher finance charges contributed to the group reporting a loss after tax from continuing operations of R1.6bn.
BUSINESS REPORT ONLINE