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African Oxygen Limited

Release Date: 30/11/2004 14:59:54      Code(s): AFX
African Oxygen Limited                                                          
Press Release                                                                   
30 November 2004                                                                
REVISED TERMS FOR BEE TRANSACTION - AFROX TO INVEST 25% IN BIDCO                
African Oxygen Limited (Afrox) today announced that it would replace Medi-Clinic
as the 25% shareholder in Bidco, the black empowerment consortium which has     
agreed to purchase AHealth.   In an agreement announced between Afrox, AHealth, 
Bidco and MediClinic, MediClinic have agreed to terminate its involvement with  
Bidco on all levels. The previous shareholders agreement and the disposal       
agreement whereby MediClinic were to have acquired certain AHealth beds have    
been cancelled with immediate effect.                                           
All parties have worked together to find a solution to facilitate the           
satisfactory outcome of the Bidco transaction.  The revised proposal involves   
the introduction of new BEE funders and the commitment by Afrox to invest in    
Bidco.  Bidco was incorporated solely for the purpose of acquiring the issued   
share capital of AHealth. A consortium of Black Economic Empowerment investors  
("Beeco"), led by Brimstone ("Brimstone") and Mvelaphanda Strategic Investments 
("Mvelaphanda") will together, directly or indirectly, hold 75% of the ordinary 
issued shares of Bidco;  Afrox will hold the remaining 25%.                     
Afrox will distribute the net proceeds from the disposal of its 69% shareholding
in AHealth to its shareholders. In a separate transaction, on the operative date
of the Shareholder Scheme, Afrox will subscribe for further shares in, and      
advance loans to Bidco in an amount of R 375 million.                           
Commenting on this revised deal, Afrox CEO Rick Hogben, said: "It became clear  
to us that continued opposition to the deal could be protracted and would not be
in anyone"s interests.  We have found a solution, acceptable to all parties,    
which enables us to continue to pursue this landmark BEE transaction, which is  
particularly important in the context of the anticipated Healthcare Charter."   
Hogben continued:  "The healthcare business needs to be protected; this has been
a difficult period for all our staff and Doctors and we value their continued   
hard work and loyalty.  Afrox continues to believe that a deal which provides   
AHealth with a BEE partner is a significant advantage in remaining competitive  
and well-positioned to pursue new investment opportunities in the healthcare    
sector, both locally and internationally. With the evolving South African       
national healthcare system, an empowered AHealth will be ideally positioned for 
growth and profitability."                                                      
Any continued interference with the transaction can only be indicative of an    
effort to interfere with black economic empowerment, as all others grounds for  
objection have now been removed.                                                
Commenting on the revised deal, Prof Jakes Gerwel, Chairman of Bidco and        
Brimstone Investment Corporation said:                                          
"All parties have worked steadily to find an acceptable solution. The provision 
of funding is moving ahead as planned, and Bidco is hopeful of having all of the
issues pertaining to independent funding in place before the Tribunal reconvenes
in January 2005."                                                               
Gerwel continued: "We look forward to working within the revised shareholding   
structure. We welcome Afrox"s reinvestment as it facilitates the conclusion of  
the transaction. It is also our intention to bring our supporting doctors in as 
shareholders in AHealth, once this deal has been finalised and settled, in a    
manner yet to be determined. It is important to us to have the interest and     
support of our Doctors."                                                        
Afrox"s original decision to dispose of its entire shareholding in AHealth, was 
based on the fact that Afrox had derived substantial growth from AHealth and its
belief that the healthcare business had attained the requisite scale and level  
of sophistication such that operating as an autonomous empowered entity would   
enable it to pursue its own growth initiatives without restriction.  Afrox      
firmly believes this still holds true.                                          
Afrox, AHealth and Bidco have also agreed to further extend the Merger Agreement
and the date for fulfillment of the Competition Condition in the Shareholder    
Scheme and of the Shareholder Scheme Condition in the Employee Scheme to 23     
January 2005. Provided that Bidco"s funding is in place by that date, there will
be a further extension to enable the Competition Tribunal to make its decision. 
An application has been brought in the South African High Court by two          
shareholders in AHealth to have the Scheme of Arrangement declared to have      
lapsed. This application, which is being opposed, is currently due to be heard  
in the week commencing 29 November 2004. The parties hope that following the    
announcement of this revised transaction, the applicants will withdraw their    
application.                                                                    
Dr Jackie Mphafudi, Chairman of Mvelaphanda Strategic Investments, expects the  
Competition Tribunal to approve the acquisition of Ahealth: "This new           
arrangement brings no material change, other than significant empowerment       
ownership, to the healthcare industry. With the Healthcare Charter that is in   
the process of being formulated, this is a welcome development and a landmark   
deal. Any possible intervening party will now only be trying to feather its own 
nest."                                                                          
Hogben concluded, "I extend my appreciation to Bidco, Mediclinic and Afrox      
stakeholders for their commitment to finding a workable solution for this deal."
                         -ends-                                                 
For further information on Afrox please contact:                                
Brunswick                     (011) 268 5750                                    
Rob Pinker                         083 326 7794                                 
Taryn Proksch                      083 273 1301                                 
For further information on Bidco please contact:                                
College Hill                       (011) 447 3030                               
Johannes van Niekerk               082 921 9110                                 
Date: 30/11/2004 03:00:00 PM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             
                                                                                
                                                                                
                                                                                



                                        
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