Ascendis Health’s annual meeting on December 20 might turn out to be a lively affair considering the chairman will preside over a resolution to oust him, while support for a host of new director nominations might also be tested.
Ascendis Health, the health and wellness group, came close to collapse, but its shareholders this year gave the nod to a restructuring plan that saved the company from going into business rescue, and involves recapitalisation transaction to settle debt of about R7.7 billion owed to senior lenders.
The current major lenders are Blantyre Capital and Letter1. The ‘new’ post-recapitalisation Ascendis Health will comprise three local businesses, namely Medical Devices, Pharma and Consumer Health.
The notice for the annual meeting contains a clause that says that recent proposed additions to Ascendis’ board have not yet been approved by the lenders, and if there were changes in directorship without their approval, the debt facilities granted to Ascendis may become payable immediately.
Ascendis in a “revised” notice of annual general meeting said this month that it had received, “demands to include resolutions” for the appointment of directors and for the ousting of chairman Andrew Marshall, who will also chair the shareholders meeting.
Chief executive Mark Sardi who has headed Ascendis through the recapitalisation, but recently announced his resignation, said there was a group of shareholders opposed to the chairman. He, however, had found Marshall’s leadership supportive and decisive.
Sardi said the lenders were still in the process of deciding whether they approved the new director nominations, that the 30-day vetting period was a normal period, and that he expected they would decide before the annual meeting.
He said the lenders typically vetted the new directors to see if their goals were aligned with those of the lenders’ goals, and the recapitalisation plan.
Meanwhile, a stakeholder emailed Business Report a list of his concerns regarding the nominations to the board, the first being that the leader of the so-called Ascendis Activist Investor Group (RAI) Harry Smit had no board experience, and intended to remove all existing directors at the AGM, and that he may not be approved by the lenders, putting the entire company in jeopardy.
“Harry has less than 0.01 percent shareholding in the company yet he ‘talks on behalf of’ more than 30 percent of the shareholders. He has claimed power, but his limited experience means the RAI have the potential to do significant damage by supporting the wrong course of action for the group,” the stakeholder said.
The stakeholder also raised questions about the suitability of the other nominations as directors: former Ascendis directors Gary Shayne and Karsten Wellner, both founding directors of Ascendis, as well as businessman Laurence Mulaudzi,.
Smit declined to comment on Business Report questions, except to say that his input at board meetings so far had been well received and indeed, applauded.
Sardi said each of the new directors brought some unique skills and experience to the board.
The stakeholder was emphatic:“Ascendis currently has no clear strategic direction. There is no likelihood of a buy-out transaction given the communicated intentions of RAI; the board is crumbling and the management team are on contracts until July 2022 with no CEO; the reinstated debt is accumulating interest at 10-13 percent and there are no parties currently involved with the relevant experience to right the ship,” the stakeholder said.
BUSINESS REPORT ONLINE