Ascendis Health, the drugs-maker forced to significantly restructure over the past 18 months to settle debt, said yesterday that it and Austell Pharmaceuticals had agreed to increase the sell price of Ascendis Pharma by R22 million to R432m.
However, while the increase in price is good news for Ascendis, the amount was not deemed significant enough to warrant the issue of a supplementary circular to shareholders on the terms of the disposal, Ascendis directors said in a JSE regulatory notice yesterday.
The share price notched up 5.4 percent to 78 cents yesterday morning, but the price, for longer term shareholders, still represents significant value destruction considering the price was R4.25 three years ago, and as high as R20.32 five years ago.
Earlier this year Ascendis’s subsidiary AHSA said it intended to sell the Ascendis Pharma businesses to Pharma-Q Holdings and Imperial Logistics, and in the event shareholders do not approve this disposal, the businesses would be sold to Austell.
The Ascendis board said yesterday their recommendation to shareholders to vote against the Pharma-Q/Imperial Pharma offer and for the Austell Pharma disposal, remained unchanged.
Austell, according to previous reports, made the offer for Ascendis Pharma in May as part of a R590m six-month loan facility it provided to Ascendis Financial Services.
At the time, Ascendis’s board said the new loan removed the threat of enforcement action by the lenders, was creating a more stable environment in the short term for Ascendis and would reduce its cost of borrowing, significantly.
The Austell loan facility was reached after Ascendis’s previous funders Apex Management Services called in R550m of debt facilities because Ascendis made changes to its board that had not received the prior written approval of the lenders.
Austell Pharmaceuticals is the largest 100 percent black-owned pharmaceutical company in South Africa.
BUSINESS REPORT