JSE-listed pharmaceuticals company Ascendis Health has advised of Blantyre Capital and L1 Health's interest to have the company be recapitalised, instead of it continuing to pursue a divestment strategy.
The divestment strategy was effected to reduce the highly-leveraged position of Ascendis and, in particular, loans outstanding to a consortium of third-party financiers or consortium lenders.
Blantyre and L1 Health have, through funds managed and advised by them, increased their aggregated exposure as a consortium lender to more than one-third of the aggregate exposure of all consortium lenders.
Blantyre and L1 Health have stated that, with the exception of the disposal of certain noncore assets already subject to advanced negotiations, they are of the view that the current divestment plan is not in the best long-term interests of the company and its stakeholders.
Instead, they believe that a recapitalisation of the group should be pursued to reduce leverage to a sustainable level and provide the funding necessary to maximise the long-term strategic value of the business.
Blantyre and L1 Health have invited the Ascendis board to negotiate, on an expedited basis, a reorganisation of Ascendis’ capital structure with their support and have indicated a willingness to invest further into the company to achieve this outcome.
The senior facilities agreement, which includes the divestment strategy, with consortium lenders remains in place while the board assesses the strategic direction of the company.
L1 Health is a long-term investor in the healthcare sector and an indirect wholly-owned subsidiary of Letterone Investment Holdings, which, in turn, is an international investment business with about $24-billion in assets.
Blantyre is a London-based investment firm focused on partnering with companies in relaunching good businesses facing temporary financial challenges. Blantyre had been a member of Ascendis’ consortium of lenders for some time.