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African Oxygen Limited - Press Release - Afrox Re-positions In Readiness For

Release Date: 27/02/2004 15:03:19      Code(s): AFX
AFRICAN OXYGEN LIMITED - PRESS RELEASE - AFROX RE-POSITIONS IN READINESS FOR    
                         SALE OF AFROX HEALTHCARE                               
African Oxygen Limited                                                          
(Incorporated in the Republic of South Africa)                                  
(Registration number 1927/000089/06)                                            
JSE Share code: AFX                                                             
ISIN: ZAE000030920                                                              
PRESS RELEASE - AFROX RE-POSITIONS IN READINESS FOR SALE OF AFROX HEALTHCARE    
27 FEBRUARY 2004                                                                
African Oxygen Limited (Afrox) announced today (Friday 27 February) that its    
shareholders had approved, by a 99 percent majority, the disposal of its        
subsidiary company, Afrox Healthcare Limited (AHealth) to the black economic    
empowerment group, Bidco.                                                       
With this confirmed as well as AHealth"s Scheme of Arrangement, regulatory      
approval from the Competition Tribunal is awaited, and the sanctioning of the   
Scheme by the High Court.                                                       
Bidco is a company owned by a consortium of black economic empowerment          
investors, led by Brimstone Investments (Pty) Ltd and Mvelaphanda Strategic     
Investments (Pty) Ltd and Bidco will acquire 75 percent of the issued share     
capital of AHealth.  Medi-Clinic will subscribe for a minority non-controlling  
shareholding of approximately 25 percent.  The transaction, once finalised, will
be the biggest black economic empowerment initiative outside the mining         
industry.                                                                       
The Afrox annual general meeting followed the shareholder meeting where chief   
executive, Rick Hogben said, "The separation of Afrox and Afrox Healthcare      
follows Afrox"s strategy to maximise industrial growth potential.  It will also 
allow us to broaden our existing industrial market opportunities both locally   
and outside of South Africa."                                                   
Hogben said, "This year marks our 40th year as a listed company in which time   
our annual compound growth has averaged 14,2 percent and we have never cut a    
dividend.  This year, however, without Afrox Healthcare, Afrox will be a smaller
but more keenly focused company."  He confirmed that the company is committed to
continue to provide shareholders with sustained above average growth.           
"We continue to focus on understanding customers" needs.  Our drive to re-      
position the company as a world-class customer-centric supplier will, we are    
sure, lead to increased customer loyalty and commitment, and will support our   
drive to grow sales in both local and overseas markets."                        
"We are also reviewing and upgrading our merchandising and marketing.  We now   
have a specialist retail executive playing a role in upgrading and repositioning
our retail centres, and reviewing their location and concentration."            
With the support of BOC"s world-class infrastructure, technology advantage and  
global access to markets, Afrox is exporting its own manufactured gas equipment,
industrial products, new medical regulators and an internationally compliant    
range of regulators for special gases.  The products meet European, Australian  
and American standards.  Hogben said, "We are intent on growing this business   
and expanding our unique export model with BOC as our marketing, sales and      
distribution partner."                                                          
Referring to the 2003 performance, Afrox chairman, John Walsh said, "During the 
2003 financial year revenue increased by 13 percent to R7,3 billion, operating  
profit was up 22 percent to R1,1 billion, net profit was up 42 percent to R554  
million, and total dividends per share increased by 33 percent to 83 cents.  On 
a segmental basis our industrial business represents 62 percent of net profit   
and the healthcare business 38 percent."                                        
"Corporate governance issues have received considerable prominence.  Compliance 
with the King II report has increased our focus on standards of performance and 
disclosure and I believe our company is well run and has processes and          
procedures in place to ensure the highest standards of stewardship," said Walsh.
2003 was a particularly notable year for Afrox.  The company received Deloitte &
Touche"s 2003 Good Governance Award for the best-governed company in South      
Africa and was also placed first in the Board Effectiveness and Corporate       
Integrity and Ethics categories.  In addition Afrox"s community involvement was 
selected by the United Nations for a case study as an excellent example of an   
employee driven, sustainable social development initiative.                     
The company received the Department of Science and Technology"s Most Outstanding
Technological Innovation for 2003 award in acknowledgement of the AfroxPac 35   
self-rescuer for use by underground miners, and NOSA rated Afrox as one of the  
top ten companies in South Africa awarding the company a 5-star corporate       
rating.                                                                         
Walsh said, "While it is pleasing to receive awards we do not chase recognition 
but we strive to meet our legal and ethical responsibilities because it makes   
good business sense.  In a similar vein, behavioural policies that were inherent
in the company, and which we view as nation building commitments, have been     
cascaded to the entire Afrox team.  While many of the concepts contained in the 
policies have existed all along, we now have formal guidelines to follow.  These
policies reaffirm our commitment to our code of conduct, black economic         
empowerment, employment equity, corporate social investment, and our HIV/AIDS   
programme."                                                                     
Hogben concluded by saying, "The parting of the ways with Afrox Healthcare is an
emotive issue.  Over the past 20 years many of our people have worked for both  
Afrox and Afrox Healthcare and strong friendships have been forged.  We are     
proud of the performance of Afrox Healthcare which has grown exceptionally,     
providing steady revenues for Afrox since the first four hospitals were         
acquired, and which is now a R4,5 billion business.  We wish all our colleagues 
in Healthcare well as they embark on their new path to the future.  We have no  
doubt they will continue to be a hugely successful company."                    
Issued by African Oxygen Limited (Afrox)                                        
For further information contact:                                                
Chris Fieldgate                                                                 
(011) 490 0430                                                                  
or 082 495 1481                                                                 
or Ros Beart                                                                    
(011) 490 0712                                                                  
or 082 891 5149                                                                 
Date: 27/02/2004 03:03:21 PM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             
                                                                                
                                                                                
                                                                                



                                        
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