Ascendis Health to offload 49% stake in pharmaceutical company Farmalider as it recapitalizes

SOUTH AFRICA – Health and wellness company Ascendis Health will sell its 49 percent stake in Farmalider to MMC International Health Holding for US$6 million as part of its plan to recapitalize the local group, a statement from the company has said.

The Farmalider interest was to have been part of a group of disposals, but creditors had instead consented to the separate disposal of the company.

Farmalider is a Spanish pharmaceutical company that develops, licenses and supplies mainly generic and over-the-counter products to a range of multinational companies.

Farmalider typically out-licenses and supplies differentiated products either from their own factory or from within their network of suppliers.

It owns more than 150 products and holds marketing authorisations in several countries, with the core of its operations in Europe.

Ascendis Health had acquired its interest in 2015.

Farmalider’s products target mainly pain relief with combinations of paracetamol, ibuprofen and tramadol and also competes in other therapeutic areas such as cardiovascular, antibiotics, osteoporosis, antivirals and antidepressants.

Asendis’s board said in the statement they would use the proceeds to reduce debt.

As part of the disposal, Ascendis Pharma will gain indefinite and exclusive access to Farmalider’s portfolio of products for 14 Southern African Development Community countries, including South Africa, and 11 other African countries.

In March 2021, Ascendis Health reached an agreement with its lenders for the restructuring and recapitalisation agreement with its creditors Blantyre Capital and L1 Health for the settlement of its outstanding debt of US$532.5 million.

However, the group said the proposed transaction required 75 percent of shareholder approval, adding that if it did not receive the required shareholder support, the senior lenders would be able to enforce their rights and Ascendis Health would be placed in business rescue.

The agreement comes after Blantyre Capital and L1 Health increased their exposure to the company’s debt to more than 75 percent of the aggregate exposure of the company’s consortium of external lenders in February.

In April 2021, Ascendis Health swung into a massive US$47.2 million loss from a US$14.4 million profit in 2020 as rising debt, higher finance costs, increased tax expenses and impairments hurt its performance during the six months to end December.

The health and wellness company said that it incurred a US$17.3 million impairment during the period with a tax expense increasing to US$9.7 million and net debt rising to US$462.8 million.

It said revenue, however, surged 33 percent to US$279 million, despite the losses, with normalised operating profit increasing by 27 percent to US$34 million.

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