The nearly 170-year-old drug maker, with a presence in about 56 countries, said on Friday it expects to report half-year results slightly above its forecast as its manufacturing unit benefited from the restart of heparin sales to third party customers.
At 0856 GMT, shares in Aspen were 3.11% firmer at 110.88 rand, having risen as high as 113.72 rand, and on course for their biggest one-day gain since December 17.
The market also cheered Aspen for lowering its debt to about 38 billion rand ($2.53 billion) by Dec.31. The firm said its leverage ratio, which assesses the ability of a firm to meet its financial obligations, is likely to end between 3.50x and 3.60x against a covenant threshold of 4.0x, the firm added.
Aspen said assuming the net proceeds from the sale of its Japanese business to Swiss drugmaker Novartis were received on Dec.31, the leverage ratio would have been between 3.20x and 3.30x.
Investors have been concerned about Aspen's debt in the last two years after levels moved close to breaching debt covenants.
In September it said it was aiming for a leverage ratio of less than 3.0x in the medium term as it bets on positive free cash flows and a substantial decline in planned capital expenditure after the 2020 financial year.
"The forced sale of the formula business and the Japanese business seems to have saved Aspen from a rights issue," Vestact Portfolio Manager, Byron Lotter said in a note.
"I expect the share price to react positively to this news. At these levels, it seems to be a good potential turn around story."
(Reporting by Nqobile Dludla; Editing by Kirsten Donovan)