ASCENDIS GETS NEW LENDERS AND EXTRA TIME
A ‘special situations’ Apex investor, along with an SA group, have picked up the struggling firm’s debt and given it two more weeks to solve its problems.
Ascendis will be seeking new terms with a consortium led by investment group Apex Partners and incorporating a “leading BEE health and beauty group,” which have acquired its debt from international investment groups Blantyre Capital and L1 Health.
The group’s previous financiers had given Ascendis until December 29 to provide firm answers on how the debt they had called in was to be repaid. This followed a board shake-up at a last-minute AGM on December 20, which saw appointments without their prior approval. The group’s new financiers means it would have achieved the first milestone set out by its lenders as part of an agreement for them to not exercise their legal right for immediate repayment.
Apex invests in performing and underperforming businesses in SA’s industrial sector, and counts JSE-listed Sabvest Capital as a major shareholder.
Ascendis said on Thursday the new financiers would allow for the localisation of its debt, while the consortium, which operates in the same markets, would serve as a strategic partner.
All the milestones in the agreement, which included proof of shareholder support for any plan, have been pushed back by two weeks to allow for the transfer of the debt, after which Ascendis aims to agree and conclude new terms with the consortium.
Ascendis, valued at R443m on the JSE, concluded a debt-for-asset swap with lenders earlier in 2021 in terms of which it let go of its profitable European businesses, enabling it to settle debt of €444m (about R8bn). It has still been left with €15m in reinstated debt, and a €20m, two-year facility for head office restructuring costs and working capital.
The restructuring saved the group from a spiralling debt situation, but Ascendis was then the subject of a struggle among shareholders.
The AGM was postponed from earlier in December, but a last-minute court battle, led by Cambridge Investments and activist shareholder Harry Smit, resulted in a court order that ensured the AGM went ahead.
During the AGM, Andrew Marshall was kicked off as chair and former Ascendis CEO Karsten Wellner and Gary Shayne returned to the board, alongside Smit. Wellner and Shayne were involved in Ascendis’s acquisition spree, which led to its debt problems. Marshall was since convinced to step into the CEO role as planned.
The options that had been given to Ascendis by its lenders include signed sale agreements for two of its remaining businesses, Ascendis Pharma and the consumer division, or the sale of only Ascendis Pharma and progress on a rights issue to show the group repay debt. Another option was for the company to find a new financier. The lenders also wanted proof of partial shareholder support, with one of the original milestones requiring 50% shareholder support for any plan by January 15.
In afternoon trade on Wednesday the group’s shares were down 3.19% to 91c, but have risen 11% since the AGM was held, including a 20% gain on December 23, the day after the group announced lenders had pulled their facilities.
Its shares have now risen just over a fifth so far in 2021, but have lost more than 96% of their value over the past five years.
With Katharine Child
