Aspen Pharmacare Holdings said on Tuesday its debt as of June 30 had fallen below R40-billion and that its debt levels were safely below a covenant threshold, sending shares in the South African drugmaker up more than 9%.
That was down from R53.5-billion on December 31.
Investors have been concerned about Aspen's rising debt levels for about a year as levels moved close to breaching debt covenants.
The leverage ratio, which assesses the ability of a firm to meet its financial obligations, is expected to end between 3.60x and 3.70x against a covenant threshold of 4.0x.
Aspen shares jumped nearly 14% after its trading statement to a level last seen on August 5, before paring gains to trade 9.07% firmer at R83.80 as of 1149 GMT.