JSE-listed Ascendis Health’s (Ascendis’) negotiations with Austell have been completed and Ascendis Health SA Holdings (AHSA), a wholly-owned subsidiary of Ascendis, has now concluded an agreement with Austell for the sale of Ascendis Pharma to Austell Pharmaceuticals.

The disposal of Ascendis Pharma to Austell at full value of R410-million materially reduces Ascendis’ outstanding debt under the Austell facility and provides a platform to refinance the outstanding debt at commercial terms, restoring balance sheet stability to Ascendis, Ascendis notes.

The aim of Ascendis remains the achievement of long-term financial sustainability for the company and its subsidiaries and the board continues to explore other opportunities for the group to repay its senior debt facilities as soon as possible, while also ensuring the availability of sufficient capital to meet working capital requirements.

In May, shareholders were advised that Ascendis had concluded a loan agreement with Austell in terms of which Austell would advance a facility of R590-million.

Shareholders were also advised in May that if they do not approve of the sale of the Pharma business unit to an unincorporated joint venture between Pharma-Q and Imperial Logistics, an event of default under the Austell loan agreement would be triggered if Ascendis did not then agree to sell Ascendis Pharma to Austell.

Under the terms of the sales agreement with Austell, Ascendis will sell the entire issued share capital of Medicine Developers International, Pharmachem Pharmaceuticals, Alliance Pharma and Ascendis Pharma, being the entities through which Ascendis Pharma operates, to Austell.

Ascendis Pharma operates primarily within the private and public sectors of the South African pharmaceutical industry and is a marketer and distributor of both prescription and over-the-counter medicines.

It owns brands in the therapeutic areas of the gastrointestinal tract, cough and cold, pain, diabetes and niche generic therapeutic segments of the domestic pharmaceutical market.

The sale of Ascendis Pharma to Austell is subject to the approval of Ascendis shareholders.

Ascendis’ share price on the JSE rose by more than 12% following the announcement of the proposed sale on July 19.