Just before Christmas, the news broke of major changes at Ascendis.
Activist shareholders were voted onto the board and the international lending group (Blantyre) triggered its option to put Ascendis (JO: ASCJ ) to terms on the repayment of the debt. In other words, the debt collectors suddenly arrived at the door and they were carrying large sticks.
Several extremely difficult milestones were put forward by Blantyre. Essentially, Ascendis had to come up with the money very quickly or face a horrible time at the hands of the lenders.
On 30th December, as 2021 was in its closing stages, Ascendis announced that the debt had been sold by Blantyre to a South African consortium led by special situations investor Apex Partners.
Debt is simply a set of legal rights to receive a certain amount of money, so that right can be sold off to another party.
This looks to be a major victory for Ascendis and certainly buys a lot of time. Instead of negotiating with wolves offshore, the company will now structure the way forward with Apex and the consortium as local parties.
The 30th December announcement noted the opportunity to find synergies with the consortium as a strategic partner and the benefit of localising the debt. I agree with both those points.
Perhaps because half the investors in the market were on the beach or in game reserves when that announcement came out, Ascendis has released a further update. There isn't much to the latest announcement, to be honest. The transfer of the debt from Blantyre to the consortium is underway and Ascendis is negotiating with the consortium regarding the way forward.
This is still a highly speculative stock and the price hasn't seen the kind of action that Steinhoff (JO: SNHJ ) saw in December as a result of solving many of its legal battles. Volatility is likely to be the name of the game as the company charts a way forward.
Overall, things are at least looking up for the company (at last).
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So this means that the amount of one share is still to rise?Like 2