Lenders impose new conditions on Ascendis recapitalisation
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THE shareholder revolt at Ascendis Health that resulted in a change of board on Monday took a twist yesterday when the lenders in the recapitalisation plan withdrew their support.
In terms of the plan, any board changes would have had to have been approved, in writing, by the lenders, or face cancellation of the recapitalisation transaction, but several board changes were made on Monday at a controversial annual general meeting, despite no such approval being received.
Ascendis said yesterday its board had been engaging with lenders about a proposal to settle the outstanding debt, and the conclusion of the disposal of the Pharma division, and possible other business units, among other options.
“Shareholders are now advised the agent delivered a notice to the company confirming the mandatory prepayment provision has been triggered, and all outstanding utilisations of the facilities, together with accrued interest and all other amounts accrued … were immediately due and payable,” the company said in a statement.
A “forebearance agreement” had been reached with lenders, conditions of which included delivery of a sale and purchase agreement of the Pharma and Consumer Health divisions; or the agreements for the disposal of the Pharma division and a commitment to an underwritten rights issue, by December 29.
The proceeds from these actions would be used to prepay all amounts due to the lender.
A potential disposal of the Pharma and Consumer Health divisions may leave the post-recapitalisation Ascendis Health with only its medical devices business.
At the meeting on Monday, Harry Smit, spokesperson for shareholders holding some 30 percent of the shares, gathered enough shareholder support to vote him in as non-executive director, and vote out former chairman Andrew Marshall.
Other new appointments to the board, all from the disaffected shareholder grouping, were former Ascendis directors Gary Shayne and Karsten Wellner, both founding directors of Ascendis, as well as businessman Laurence Mulaudzi.
The health and wellness group came close to collapse this year with debt far exceeding assets, but its shareholders gave the nod to a restructuring plan that avoided the company going into business rescue, and involved a recapitalisation transaction to settle debt of about R7.7 billion owed to senior lenders.