Ascendis Health, already considering an offer for its Remedica unit, is planning to sell other key businesses as the South African company battles to service debt and ensure survival, according to people familiar with the matter.
The debt-laden maker of multivitamins, probiotics and pet nutritional supplements received an unsolicited offer for Cyprian unit Remedica last month, providing relief for the worst performing stock on Johannesburg’s stock exchange last year. Ascendis has now earmarked its bio-science division for an additional sale, said the people, who asked not to be identified as the deliberations are private.
The Remedica business has been valued by Ascendis at about $400 million, compared with a 2016 purchase price of 260 million euros ($295 million), the people said. If the as-yet-unnamed buyer agrees to meet that price, it would generate proceeds of more than double Ascendis’s current market capitalisation of R2.4 billion ($176 million).
The drugmaker didn’t immediately respond to a request for comment. On Wednesday, Ascendis said South African investment firm Legae Peresec has increased its stake in the company to 5%.
Under Chief Executive Officer Thomas Thomsen, Ascendis has started a review of its business to bring down total liabilities of more than R9 billion. The company has R200 million in outstanding payments this year and about R4.4 billion due in 2021, according to data compiled by Bloomberg.
The 2018 share slump has had implications for its largest shareholder, private-equity firm Coast2Coast Capital. Its Chief Executive Officer Gary Shayne, along with his spouse and associated companies, have been forced to sell or transfer about R225 million worth of Ascendis shares since November. Most of the disposals were triggered as the stock was used as collateral for loans. The company plans to release cash flow statements to lenders by the end of the month, one person said.
The stock has climbed 27% this year, compared with 1.8% on the benchmark FTSE/JSE Africa All Shares Index. Ascendis shares rose 0.2% to R5.28 as of 10:42 am in Johannesburg, extending Thursday’s 1.2% gain.