The deal is subject to shareholder approval and will be worth R410 million.
Ascendis Health says it has reached terms on a R410m sale of its pharmaceutical business to its latest financier, Austell, one of two offers on the table for a business whose brands include Reuterina and Sinucon.
The sale, still to be approved by shareholders, is necessary to avoid a ratcheting up of debt payments. Ascendis is experiencing problems, including multiple board shake-ups in recent months and new lenders.
Shareholders will be asked to vote on two transactions. One from Austell, SA’s biggest wholly black-owned pharmaceutical group, which stepped in as a new lender in May. The other is a R375m offer from a consortium of Pharma-Q and Imperial Logistics, former lenders of Ascendis.
Austell, founded in 2005, owns a range of therapeutic brands, including Prospan, SA’s most-prescribed cough medicine, and is interested in Ascendis Pharma’s therapeutic brands, including in the cough and cold, pain, diabetes, gastrointestinal tract and niche generic therapeutic segments.
Ascendis, valued at R318m on the JSE, had a debt pile of R582m at the end of December, and in February had announced R802m worth of deals that would have left it with R200m to grow its consumer brands business, a vitamin and supplement supplier with labels including Solal and Junglevite.
Ascendis has existed since 2008, and its shares have been traded on the JSE since 2013. In 2015, as part of its international expansion, the holding began buying up assets in Europe, which subsequently had a negative effect on its financial situation.
In 2021, Russian billionaire Mikhail Fridman's LetterOne and British investment firm Blantyre Capital exchanged Ascendis Health's outstanding debt for the company's European assets including Remedica and Sun Wave Pharma. LetterOne and Blantyre Capital were the largest creditors of the holding, they accounted for 75% of the debt obligations of the pharmaceutical manufacturer.
The other deals for the debt-defeated Ascendis were the R102m sale of its skincare business Nimue, the pharma transaction and the R325m sale to Apex Partners of Ascendis Medical, which imports and distributes medical devices such as diagnostic and surgical equipment.