Embattled health and wellness group Ascendis Health reached a restructuring and recapitalisation agreement with its creditors Blantrye Capital and L1 Health to settle more than R7 billion in debt.
The group's share price jumped by 9% on Wednesday morning after the announcement. In the past five years, the Ascendis' share price plummeted by more than 97%, following a raft of debt-funded acquisitions between 2016 and 2017.
Ascendis owns brands such as Nimue skin products, Vitaforce supplements and pet products like Triworm, across its consumer, pet and pharmaceutical portfolios.
In a statement on Wednesday, Ascendis said as part of its agreement to settle the €447 million (about R7.6 billion) debt, its lenders will take control of its European subsidiaries, including its Cyprus-based pharmaceutical business Remedica, Sun Wave Pharma in Romania and Ascendis' 49% stake in Farmalider, a pharmaceutical company in Spain.
The lenders will also get proceeds from the group's disposals of its South African animal health, biosciences and African respiratory care businesses. Negotiations for the sale of these businesses are at an advanced stage. The group will keep its local medical devices, consumer brands and pharmaceutical businesses.
CEO Mark Sardi said the agreement was the best outcome.
"The agreement provides an opportunity to protect the value of the company's South African assets as well as the interests of all stakeholders, including shareholders, creditors, suppliers, customers and employees," he said in the statement.
Ascendis has also been given new debt facilities of €15 million (about R254 million) that will be used towards the company's recapilisation. It received a new drawdown facility of €20 (about R339 million) to fund leftover transaction costs and working capital requirements.
Sardi said the drawdown facility will provide Ascendis with future working capital and bridging finance.
The agreement will have to be approved by shareholders holding at least 75% of Ascendis shares. If that fails, the group will go into business rescue.
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