ASCENDIS Health said yesterday that it had reached a deal to sell its Ascendis Animal Health division for R770.19 million as it ramps-up the disposal of non-core assets to reduce its unsustainable debt levels.
The South African-based global health and care company concluded the sale of a shares agreement between subsidiary Ascendis Health SA Holdings and the purchaser, Acorn Agri & Food, as well as with the guarantor AAF Invest, for the disposal of the entire issued share capital of the Ascendis Animal Health division.
The Animal Health division consists of Ascendis Vet, Ascendis Animal and Kyron Prescriptions and Kyron Laboratories (Kyron).
The net asset value of Animal Health at the end of December 2020 was R567.39m and the profit after tax was R32.85m.
The group explained to its shareholders that the rationale for the disposal, as explained by its board previously, was to reduce the group’s unsustainable debt levels.
“The disposal is in line with the objectives of the group recapitalisation. The company took the strategic decision to dispose of Animal Health due to the business being non-core to the company’s long-term strategy,” the group said.
“The disposal is subject to the approval of the disposal and release of security by the Ascendis Health lender group as required under Ascendis Health’s senior facilities agreement having been given and the approval of relevant competition authorities in relation to the disposal having been obtained,” the group said.
In mid-May the group reached an agreement with its lenders for the restructuring and recapitalisation agreement with its creditors Blantyre Capital and L1 Health for the settlement of its outstanding debt of €447m (about R7.7 billion).
The agreement between Ascendis Health and Blantyre Capital and L1 Health came after the lenders increased their exposure to the company’s debt to more than 75 percent of the aggregate exposure of the company’s consortium of external lenders in February.
Ascendis Health has already sold some of its businesses during the year in an effort to reduce its debt levels.
In June, the group announced the planned disposal of its 49 percent shareholding in Spanish pharmaceutical company, Farmalider, for R84m.
Ascendis also announced plans to sell Respiratory Care Africa for R450m, and also the Biosciences business for R85m in May.
The group said the disposal would be implemented on the closing date, expected to take place in the fourth quarter of the 2021 calendar year.
Ascendis Health closed 3.57 percent lower at R0.54 on the JSE yesterday.