In what appears to be an opportunistic move, black-owned pharmaceutical company Austell has offered to provide troubled pharma company Ascendis with a R590-million loan facility in exchange for the right to purchase its subsidiary, Ascendis Pharma, which distributes over-the-counter and prescription medicines.However, this most recent offer was triggered by a planned special general meeting of shareholders to be held on Wednesday, 11 May.
And in terms of the current loan arrangements, any change to the board of directors, which has not received the approval of the lenders, could trigger a cancellation of the debt facilities, making them immediately due and payable. This is where Austell hopes to play a role. Prior to that, the over-indebted company had cut its debt down from R6.7-billion on 30 June 2021 to R582-million at the end of December 2021 through the sale of assets, including Respiratory Care Africa, Remedica, Sunwave and Farmalider; itsanimal health businesses and generics business Dezzo Trading, which it sold to Austell in early 2021.
Harry Smit, chairman of Ascendis, noted that he was aware of the Austell offer, but was not at liberty to discuss it. “The problem with this offer, and others before it, is the conditionality. It requires that the sale of Ascendis Pharma to Austell is concluded within three months. That is impossible,” said Pettit.