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Ascendis Health Ltd. – JSE:ASC


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#781 Shi

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Posted 03 February 2021 - 07:02 PM

That is very insightful @andi222. I do however think that we need to look at the private equity angle (that is the type of company that Blantyre is however). With this, they will take over all shares and delist ASC. After a number of years, they will relist ASC (doing this in Europe as well should be more lucrative than in SA).

 

They could do this by way of converting some debt to equity, but then end up with more than 35%. This would mean that they have the option of making an offer to all minorities. Thus buy all remaining shares and delist. For this to happen, shareholders will have to agree on the price of the debt to equity.

 

I do hope that they announce their plans soon - they did go from 33% to 75% of the debt in no time.

 

On the other hand, they could delist ASC and incorporate it into L1's portfolio. So many questions and uncertainty. This is why the share price will remain subdued.


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“One day Alice came to a fork in the road and saw a Cheshire cat in a tree. Which road do I take? she asked. Where do you want to go? was his response. I don't know, Alice answered. Then, said the cat, it doesn't matter.” - Lewis Carroll

#782 andi222

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Posted 03 February 2021 - 06:21 PM

So basically, Blantyre and L1 run the show now. Shareholders are at their mercy. I see no positive in that. Management has failed to drive this company out of the debt mess so these guys have hijacked it and they'll get their pound of flesh. Management is in no position to dictate any terms to them, they own the company's debt.

 

Yes agreed, however shareholders still need to agree on any equity fund raising. This needs to be approved by way of a special resolution. 

 

And Blantyre and L1 want the company to succeed and to be there in future as they have seen great potential here. I mean for them they could have just said ok lets sell all assets and we get our loans repaid. Done story. However they see more potential here. 

 

So what might their plans be? I doubt they want a rights issue as with a rights issue they would not get a larger portion of Ascendis equity. Also a rights issue would dilute the current shareholders fully if they don't take up the rights. And we currently know that they do not hold a substantial portion of the shares. 

 

So what other possibilities are there on the table? Companies can swap debt for equity or vice versa. So I think this is the most likely possibility. Under this instance we would convert parts of the debt into equity. So we would have a new biggest shareholder. Now the other question will be how much debt do we even need to convert? And at what price? Currently we have around 6 Billion debt. A healthy debt-to-equity ratio is at 3 times. So given an EBITDA of around 1.5 Billion our debt levels should sit at 4.5 billion or less. So this would mean we would need to convert 1.5 to 2 billion Rands of loans. At a current share price of 70 cents this would mean ASC would need to issue 2.5 billion shares. This is not feasible and would not be approved by current shareholders. 

 

So what now? Blantyre and L1 would need to "pay a higher price" to get a bigger stake in ASC. I would think that they do not want a controlling interest. So lets assume they aim for 40 to 49% of the share capital. This would be roughly 450 Million shares. So if a debt to equity swap will be on the table it will most likely be at a higher price. I would say at around 3 Rands or even higher to be approved at a special resolution.

 

This would be a genius move by Blantyre and L1. After such a transaction is complete they own a stake of 40 to 49% of a fast growing strong cash generating holding company and it would cost them less than 100 Million Euros. 

In the open market they would have had to pay 500 Million for just Remedica. Now they get Remedica and all other businesses.

 

I think they are also the ones holding the share price down currently. 

 

All I want to say guys is that there is huge potential for us in here and these okes have seen it. I'll be waiting for that announcement. A great future lies ahead of ASC.

 

Again this is just my personal opinion and no recommendation to trade in this share. I'm just brainstorming some ideas.

 

What do you guys think? Any other possible ideas?

in relaunching good businesses with temporary financial challenges
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#783 Investment novice

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Posted 03 February 2021 - 02:02 PM

We on 2021...there are rules of engagement...
They want

Dividend income
Tax writeoffs
Equity
Interest payments where wacc less than interest revenue...
Balanace sheet growth..


Paint as hopeless a picture....but there is an opposite....as shares are getting mopped up...someone is dumping and someone is buyimg....
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#784 Blackobar

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Posted 03 February 2021 - 01:44 PM

So basically, Blantyre and L1 run the show now. Shareholders are at their mercy. I see no positive in that. Management has failed to drive this company out of the debt mess so these guys have hijacked it and they'll get their pound of flesh. Management is in no position to dictate any terms to them, they own the company's debt.
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#785 Investment novice

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Posted 03 February 2021 - 01:11 PM

Look for head and shoulder...once the floor is mopped we going to have massive surge.. i am not an expert just a chatterbox....i am getting itchy
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#786 Investment novice

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Posted 03 February 2021 - 12:29 PM

This is very similar to what happened at matress firm....50% of ascendis for 200 to 250 million euros...
Less the 75% debt...
Considering potentially 1 billion rand swept to pay end of year debt .

We sitting with minimal debt and a company with big legs and a big brother....and dividends of 30c by 2022. And we as shareholder still own ascendis- remedica- farmilida- sunwave....

I think alternative is they take 50% equity as above and then delist and re list in europe...


Either way...we at a much better place than r1 or r2....


Remember there are laws that protect shareholders even in these instances...no need to panic...whatever is offered from a share perspective seems to be bought up quickly...dont be swayed by marlet manipulation..we not all equal...but we can have a view and take a big risk...after steinhof...i have beeg b..lls.and confidence to trut in our collective stregnth
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#787 Shi

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Posted 03 February 2021 - 11:16 AM

Also have ypur own view - write it down- whem you panic look at what you wrote down....and hold ground...bookbuild rights issue....all these words are not for the state of play...creditos want a large chunk of the company cheap....for shareholders its better then a sale...as a small pieve of gold is much better than a slightly bigger piece of brass...

 

Good advice. It is important to try and understand why the share price is under pressure at the moment. It looks like the market is scared of a big dilution as there has been no details of the re-capitalization (don't these companies ever learn!!). Given what we know (no big company sales, huge debt, Blantyre/L1 is essentially a private equity play), what do you think will happen? Also, don't be afraid to change your opinion on a share. 


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“One day Alice came to a fork in the road and saw a Cheshire cat in a tree. Which road do I take? she asked. Where do you want to go? was his response. I don't know, Alice answered. Then, said the cat, it doesn't matter.” - Lewis Carroll

#788 Investment novice

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Posted 03 February 2021 - 10:43 AM

Also have ypur own view - write it down- whem you panic look at what you wrote down....and hold ground...bookbuild rights issue....all these words are not for the state of play...creditos want a large chunk of the company cheap....for shareholders its better then a sale...as a small pieve of gold is much better than a slightly bigger piece of brass...
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#789 Investment novice

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Posted 03 February 2021 - 10:36 AM

Ignore if you holding...watch for best opportunity if you buying....
Its not where the price is but the price we exit.
If you held snh...same situation when it was at 80c and less....
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#790 Shi

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Posted 03 February 2021 - 10:17 AM

Bleeding today - 67c   :(


Edited by Shi, 03 February 2021 - 10:17 AM.

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“One day Alice came to a fork in the road and saw a Cheshire cat in a tree. Which road do I take? she asked. Where do you want to go? was his response. I don't know, Alice answered. Then, said the cat, it doesn't matter.” - Lewis Carroll

#791 Shi

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Posted 03 February 2021 - 09:47 AM

 

Thanks for the post. The twitter posts are worth more than the article though.


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“One day Alice came to a fork in the road and saw a Cheshire cat in a tree. Which road do I take? she asked. Where do you want to go? was his response. I don't know, Alice answered. Then, said the cat, it doesn't matter.” - Lewis Carroll

#792 Daytrader01

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Posted 03 February 2021 - 08:48 AM

http://www.inceconne...8&bid=434489823
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#793 Daytrader01

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Posted 03 February 2021 - 08:47 AM

http://www.inceconne...8&bid=434489823
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#794 Investment novice

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Posted 03 February 2021 - 08:40 AM

Thanks Andi. Exactly the motivation why this share should find upward momentum...and any remainder debt now can be refinanced in europe at 1% or 2% as h1b has controllimg interest now....as we start getting further updates we going to see movement...
There is potentially another 200m rands from divestment so 1billion rand debt reduction this year is doable ...achievable...
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#795 andi222

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Posted 02 February 2021 - 10:37 PM

So ascendis had 6.8 Billion Rands debt in June 2020.

What are the possible solutions for this?

-Sale of assets will be stopped. So no more proceeds from here.
-EBITDA was announced today to be around 800 Million. So for the full year I'm expecting a 1.6 Billion EBITDA.
This would mean we could nearly pump 0.8 Billion into debt repayments per year.
-In my opinion I think they can even trade themselves out of the debt given they have the support from the lenders. Which have shown their support for the long term.

However, to speed things up what other possibilities are on the cards?
- Rights issue. Personally I cannot think of another rights issue. I mean at the current share price this would make no sense. Say for example they want to raise 2 Billion. This would mean they would need to issue 2.7 Billion shares. Currently we have 500 Million. . .
- Debt to Equity swap. Maybe we could see a debt to equity swap. This would be done at a predetermined price. Hopefully higher then the current price to get approval.

But again it will be interesting to see what happens.

But for now we know we have exceptionally strong assets producing around 1.5 to 1.6 billion EBITDA per annum with lenders support.
The future is defiantly saved for now. Hopefully we as shareholders will also benefit from this.

Given the strong performance and backing of lenders I would use a market related EBITDa multiple of 8 which is very conservative to give us a high level of the company value. This would give us 1.5×8 = 12 Billion less 7 Billion debt.
5 Billion market cap would be reasonable for me or an NAV of 10 Rands per share.

Again this is just my personal opinion amd no recommendation to trade in this share.

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#796 Investment novice

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Posted 02 February 2021 - 04:04 PM

Think it could be pic dumping and a friend buying..saw this with eoh ..cannot prove this just hog wash speculation....but drove eoh to r2 and then upwards.
Good thing of institutional dilution..makes an exit likely....unlikely massive institutional exit as end 2020 financials they held strong. Think many soeculators who want short term gains ...
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#797 andi222

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Posted 02 February 2021 - 03:42 PM

For sure we need to get a SENS soon on who is pushing the price down. The last 14 trading days including today there where more then 50 Million shares traded. Issued share capital is at 490 Million.

 

That's more then 10% traded. Lets say half of this was due to people selling and buying. Still 5% was breached today. So I'm expecting a SENS soon who is dumping. 

 

Who are our biggest shareholders:

13% - International Finance corp. Doubt they are selling as they have just recently bought more

7%- Mergence investment. Doubt they are selling as they have just recently bought more

5%- Mine workers Investments. They might be selling? They are holding 25 Million shares.

5% - Gane Holdings- They might be selling? They are holding 25 Million shares.

3%- Old Mutual selling out?

2%- WDB Investments might be selling out?

1%- PIC has been selling out. Wonder why there was no SENS on this. They held 8.5% June 2020 and only 1% December 2020. But no sens????

 

Data can be checked here: https://simplywall.s...s-health-shares


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#798 Investment novice

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Posted 02 February 2021 - 01:54 PM

Asc dont have the product perhaps by next wave. But this is very good news as a new revenue line for 2021 amd 2022 . ...drs and most will use for prevention let alone treatment...
Dont expect the share to move on this...but move it will....

The acsendis gov pharma business is not doing well....this may flip that business on its head....and private sales..hospitalnsales. currentlybthere are no producers in SA...and if anyone wants to import it will be a headache with paperwork....asc does have the advantage to complete the registration and quick sale of the product....
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#799 AMG76

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Posted 02 February 2021 - 01:50 PM

Maybe of interest.
Court just ruled, as per agreement between parties, that drs may use ivermectin without applying for special permission, with certain criteria.
How does this share not move upwards, I do not understand.
I just bought some more at 73cents.
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#800 Investment novice

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Posted 02 February 2021 - 01:23 PM

Is this forming the intraday reverse head and shoulders....who knows...but get the popcorn out
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