LIFE HEALTHCARE GROUP HOLDINGS LTD - Life Healthcare increases its shareholding in Max Healthcare Institute Limited

Life Healthcare increases its shareholding in Max Healthcare Institute Limited

LIFE HEALTHCARE GROUP HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number: 2003/002733/06
ISIN: ZAE000145892
Share Code: LHC
("Life Healthcare" or "the Company")

LIFE HEALTHCARE INCREASES ITS SHAREHOLDING IN MAX HEALTHCARE INSTITUTE LIMITED


1.    INTRODUCTION

      Shareholders are advised that the Company will be increasing its shareholding in Max
      Healthcare Institute Limited ("MHC") to approximately 46.4% from its current shareholding of
      26%. MHC, the leading private hospital provider in the Delhi-NCR region, is currently a
      subsidiary of Max India, one of India’s leading multi business corporates ("the transaction").

2.    THE TRANSACTION

      2.1   Background

      In January 2012, Life Healthcare invested Rs. 516.5 Cr, (R830 million) to acquire a 26% stake
      in MHC. MHC is one of India’s leading private hospital groups and operates 12 hospitals in
      North India, with a focus on high end tertiary and quaternary care. The current transaction will
      lead to a shareholding equalisation of both joint venture ("JV") partners (Life Healthcare and
      Max India) as envisaged in the original JV agreement. The International Finance Corporation
      ("IFC") holds the balance of the shareholding.

      India is an important market for the Company’s international growth strategy and the acquisition
      of the additional shares in MHC is in line with the Company’s growth strategy. The Company is
      confident in the quality of the asset in terms of infrastructure, clinicians and the ability of
      management to deliver on the business plans.

      2.2   Terms of the transaction

      The transaction will be concluded through a 50% primary issue of new MHC shares and a 50%
      secondary acquisition of MHC shares held by Max India. The primary issue will be used to
      reduce debt and to fund further expansion. The expected date for the conclusion of the
      transaction is 31 August 2014. Post the transaction; both JV partners will have equal
      representation on the MHC Board.

      The transaction is subject to the following conditions precedent:
      -   definitive agreements being entered into between the two parties; and
      -   obtaining exchange control approval from the South African Reserve Bank and any other
          regulatory approval that may be required.

      2.3   The consideration

      The Company will invest up to a maximum of an additional Rs. 766 Cr in MHC (approximately
      R1, 350 million) at Rs.67.50 (approximately R11.91 per share). The exact amount is dependent
      on certain rights that the IFC has to participate in the primary issue and secondary sale. Life
      Healthcare will fund the transaction by raising additional debt.

Illovo
22 July 2014

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

Date: 22/07/2014 03:40:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.