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Afrox Healthcare: Agreement reached between Afrox, Bidco and Medi-Clinic

Release Date: 30/11/2004 15:01:01      Code(s): AFX MDC AHH
Afrox Healthcare:   Agreement reached between Afrox, Bidco and Medi-Clinic      
                    relating to proposed merger                                 
Afrox Healthcare Limited              Business Venture Investments No. 790      
(Incorporated in the Republic of      (Proprietary) Limited                     
South Africa)                         (Incorporated in the Republic of South    
(Registration number:                 Africa)                                   
1985/001313/06)                       (Registration number: 2003/002733/07)     
Share code: AHH                       ("Bidco")                                 
ISIN: ZAE000022059                                                              
African Oxygen Limited                Medi-Clinic Corporation Limited           
(Incorporated in the Republic of      (Incorporated in the Republic of South    
South Africa)                         Africa)                                   
(Registration number 1927/000089/06)  (Registration number: 1983/010725/06)     
JSE Share code: AFX                   Share code: MDC                           
NSX Share code: AOX                   ISIN: ZAE000004370                        
ISIN: ZAE000030920                    ("Medi-Clinic")                           
Shareholders are referred to the proposed merger between Ahealth and Bidco (a   
company jointly controlled by Brimstone Investment Corporation Limited          
("Brimstone") and Mvelaphanda Strategic Investments (Pty) Ltd ("Mvelaphanda"),  
and in which Medi-Clinic holds a 25% shareholding) by way of a scheme of        
arrangement in terms of Section 311 of the Companies Act, 1973 ("the scheme").  
Shareholders of Afrox are further referred to the Category 3 announcement of    
Afrox to be published simultaneously with the publication of this joint         
Shareholders are advised that for purposes of facilitating this important black 
economic empowerment ("BEE") transaction in the South African private hospital  
industry, Afrox, Brimstone, Mvelaphanda, Bidco and Medi-Clinic have reached     
agreement on 30 November 2004 on the manner in which the proposed merger should 
proceed ("the agreement").                                                      
Medi-Clinic participated in the formation of Bidco, which intended that         
meaningful BEE could be facilitated in the South African private hospital sector
if the sale of Ahealth took place in two separate transactions: the acquisition 
of Ahealth by Bidco and the subsequent purchase of some of the Ahealth hospitals
from Bidco by Medi-Clinic, to balance commercial and BEE goals with acceptable  
financial risk.                                                                 
New funding options now being pursued by Bidco, will, if successful, enable     
Bidco and its BEE shareholders to acquire Ahealth without the financial backing 
of Medi-Clinic.  Given the new funding options now being pursued and Medi-      
Clinic"s wish to further the cause of BEE, the parties have agreed that Medi-   
Clinic will enable the BEE companies in Bidco (Brimstone and Mvelaphanda) to    
pursue the acquisition of Ahealth without any Medi-Clinic participation.        
Terms of the Agreement                                                          
In terms of the agreement -                                                     
Medi-Clinic disposed of its 25% shareholding in Bidco to Afrox, with immediate  
the shareholders agreement between Brimstone, Mvelaphanda and Medi-Clinic in    
respect of Bidco has been cancelled, with immediate effect, and has been        
replaced by a shareholders agreement in respect of Bidco between Brimstone,     
Mvelaphanda and Afrox;                                                          
the disposal agreement in terms of which Medi-Clinic was to acquire a number of 
Ahealth hospitals from Bidco after the implementation of the proposed merger has
been cancelled, with immediate effect;                                          
Medi-Clinic shall on the operative date of the proposed merger be paid an amount
of R50 million in consideration for the cancellation of the aforementioned two  
agreements; and                                                                 
Bidco refunded all of Medi-Clinic"s transaction costs to date.                  
Afrox, Ahealth and Bidco have further extended the date for fulfilment of the   
suspensive condition of the scheme that the Competition Tribunal approves the   
proposed merger ("the Competition Condition") from 31 December 2004 to 23       
January 2005. If by 23 January 2005 Afrox, Bidco, Brimstone and Mvelaphanda have
procured the release of Medi-Clinic from its guarantee to ABSA Bank Limited, and
by virtue thereof ABSA Bank Limited has agreed to such extension, the date for  
fulfilment of the Competition Condition will automatically be extended to 31    
March 2005 in order for the Competition Tribunal hearing to be resumed and      
finalised. If by 23 January 2005 the release of Medi-Clinic from its guarantee  
to ABSA Bank Limited has not been procured, the scheme shall lapse in terms of  
its tenor.                                                                      
Afrox, Brimstone, Mvelaphanda and Bidco are working towards procuring the       
release of Medi-Clinic from its guarantee to ABSA Bank Limited and the          
replacement of it with permanent funding for the transaction by 23 January 2005.
30 November 2004                                                                
Sponsor to Afrox                          Sponsor to Medi-Clinic                
Barnard Jacobs Mellet                     Rand Merchant Bank                    
Corporate Finance                                                               
Sponsor to Ahealth                                                              
Nedbank Capital                                                                 
Date: 30/11/2004 03:01:03 PM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             

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