ASPEN: 13,998 -50 (-0.36%)
Aspen Pharmacare drops on debt worries and revenue forecast
(Adds detail and quotes)
JOHANNESBURG, Dec 14 (Reuters) - Shares in Aspen Pharmacare
fell more than 8 percent on Friday, a day after the
South African drugmaker said it had negotiated a temporary
relaxation of its lending agreements and forecast little growth
in full-year revenues.
The company, which is finalising the sale of its infant
formula business, said on Thursday it had agreed a relaxation of
its lending agreements with creditors should the transaction not
be completed by Dec. 31.
Proceeds from the 12.9 billion rand ($897.7 million) sale of
the business to French company Lactalis will be used to reduce
Jitters about the company's borrowing levels contributed to
a 35 percent share price tumble in just over a week after it
posted its full-year results.
"The market is spooked by the fact that the debt ratio is
not coming down quick enough and realising that it may have to
sell more business in the future in order to cover its debt
especially when it is growing at such levels," said Greg
Katzenellenbogen, director at Sanlam Private Wealth.
Aspen flagged revenue growth of between 1 percent and 4
percent, with a weaker performance across Europe offseting a
stronger showing for commercial pharmaceuticals in most emerging
"A company like Aspen is considered a growth stock so
revenue of between 1 and 4 percent is just not good enough,"
said Vasili Girasis, equities trader at BP Bernstein.
At 0955 GMT, the shares were down 7.68 percent at 130.76
($1 = 14.3390 rand)
(Reporting by Patricia Aruo; Editing by Jason Neely and Mark
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