Ascendis Health to sell Scitec subsidiary to restore liquidity to its balance sheet
The disposal of these assets follows Scitec's deteriorating financial performance in the past few years.
Ascendis Health has announced that it plans to sell its subsidiary, Scitec. The sale, which is valued at R101,4 million, will go towards cutting Ascendis Health’s ballooning debt of R5 billion and restore liquidity to its balance sheet.
This comes after Ascendis Health acquired businesses in Europe in 2015 as part of an international growth strategy that ended up leaving the company with a huge debt. The debt ballooned after the health company acquired Europe-based Scitec and Cyprus-based Remedica.
According to a statement, the company’s board has taken a view to investigate and progress the disposal of non-core and underperforming assets in order to reduce Ascendis Health’s debt levels.
The group added that Scitec’s financial performance had deteriorated in the past few years, driven by increased competition, profit erosion and volume losses caused by loss of key partners. As a result of this, Ascendis Health has impaired all of Scitec’s goodwill in 2019.