JOHANNESBURG – Ascendis Health said yesterday it has entered into a sale agreement with Austell Pharmaceuticals for the disposal of its subsidiary Dezzo Trading for an estimated consideration of R25 million.
The group said the consideration is capped at a maximum value of R80m.
Ascendis Health said its board has concluded that the disposal of non-core assets, such as Dezzo Trading, will assist in reducing the debt levels of the group, enhance its balance sheet and liquidity position.
“The cash proceeds from the disposal will be applied to reduce the Ascendis Health group debt levels and to fund working capital,” Ascendis Health said.
Dezzo Trading procures and sells generic pharmaceuticals and over-the-counter products to government hospitals (through tender contracts), dispensing doctors and the private sector.
The group said the disposal is subject to regulatory conditions and must be met by February 2021, but can be waived or extended by the parties.
It added that the disposal constitutes a Category 2 transaction for Ascendis Health in the Listings Requirements of the JSE and therefore does not require shareholder approval.
The disposal must also get the green light from the South African competition authorities.
Dezzo Trading’s net asset value (NAV) at the end of June was R86.33m and the loss after tax attributable to Dezzo Trading was R55.44m.
Meanwhile Ascendis Health said the transaction it entered with Healthgarde International on July 31 has become unconditional having fulfilled all conditions.
The transaction involved the disposal of the group’s direct selling business which consists of Ascendis Health Direct, Sportron International, Heritage Resources and K2012021382 (South Africa) to Healthgarde International for R10.5m.
Ascendis Health said it has received the proceeds and the funds will be used to to reduce its debt levels.
“ The effective date of the Direct Selling transaction was August 31,” the group said.