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Ascendis to sell non-core assets, denies Matjila payments

Jun 25 2018 12:57
Sibongile Khumalo

Multinational health and care brands company Ascendis Health [JSE:ASC] on Monday announced plans to dispose of non-core businesses as part of a strategy to boost profitability.

The group's sports nutrition division, the direct selling and marketing business and the Isando manufacturing facility would be sold.

"During the initial phase of the strategic review, management identified three assets for divestment which are either non-core to the longer-term strategy or not performing optimally in the current group structure," Ascendis said in a statement.

According to the company, the decision to sell the businesses would accelerate organic growth, following the completion of several local and international acquisitions. 

In 2017, Ascendis acquired Sun Wave Pharma in Romania and Cipla Vet and Cipla Agrimed in South Africa.

Ascendis Sports Nutrition is the supplier of brands such as Evox, Muscle Junkie and Nutrimax. The transaction is expected to be completed by end of July.

The company, during its half-year financial results presentation in March, indicated that its sports nutrition businesses were negatively impacted by whey protein costs.

The direct selling and network marketing business, which operate in South Africa and Nigeria, are said to be the smallest of the group, and sell the well-known Swissgarde health products.

This sale, together with that of the Isando pharmaceutical manufacturing plant, is expected to be finalised by the end of September.

The company said potential buyers were already submitting offers for the purchase of the Isando facility.

"The group is currently reviewing its capital structure to ensure capacity to meet future vendor debt liabilities and will not be contemplating any form of equity capital raise," it said.

Meanwhile, Ascendis denied media reports that it had made payments to an associate of Public Investment Corporation CEO Daniel Matjila.

In May, City Press reported that Lawrence Mulaudzi, on behalf of Ascendis, paid Pretty Louw R300 000 on the instructions of Matjila.

"This allegation is not true, and management conducted an internal investigation which confirmed that no payments had been made to this party."

"Ascendis also confirms that Lawrence Mulaudzi, who has been named in the media as a representative of Ascendis in relation to these alleged payments, is not and has never been a director, employee or representative of Ascendis," it said.

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