ADVANCED HEALTH LIMITED - Cautionary announcement regarding the disposal of 25.1% of Presmed Australia PTY Limited

Cautionary announcement regarding the disposal of 25.1% of Presmed Australia PTY Limited

ADVANCED HEALTH LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2013/059246/06)
(“the Company” or “Advanced Health”)
ISIN Code: ZAE000189049        JSE Code: AVL


CAUTIONARY ANNOUNCEMENT REGARDING THE DISPOSAL OF 25.1% OF PRESMED
AUSTRALIA PTY LIMITED



1 INTRODUCTION AND BACKGROUND TO THE PROPOSED TRANSACTION
  Shareholders are advised that Advanced Health and Investmed Holdings Pty Limited
  (“Investmed”) has reached advanced stages of negotiations for Investmed to acquire 25.1% of
  the shares in Presmed Australia Pty Limited (“PMA”) for a total transaction consideration of
  AUD5.775 million (approximately ZAR57.662 million) (the “Proposed Transaction”). Advanced
  Health currently owns 86.51%, of PMA, following the Proposed Transaction, Advanced Health
  will own 61.41% of PMA.

2 BACKGROUND TO PMA
  Presmed is the major shareholder of four-day hospitals in New South Wales (NSW), having
  management contracts in place at each one, plus an additional management contract in the only
  eye laser clinic in the Central Coast area of NSW.

3 BACKGROUND TO INVESTMED
  Investmed is an investment vehicle that was established with the belief in the strategy and future
  growth objectives of Presmed. It is owned by individuals associated with PMA, including PMA
  Management and Directors, as well as 27 key Doctor Shareholders at the day hospitals that PMA
  manages. Of the 27 Doctor Shareholders, 14 are directors of PMA and another 4 have been
  awarded Associate Professorship at two of Sydney’s leading University Teaching Hospitals.

  PMA management includes its Managing Director, Chief Executive Officer and Chief Financial
  Officer, all of whom have been working for PMA and assisting in the growth of its business, having
  a combined experience within the Company totalling over 50 years.

  Marc Resnik, the managing director of PMA, is also and executive director on the Advanced
  Health board of directors.

  In FYE 2019, the 27 Doctor Shareholders in Investmed contributed more than 60% of the total
  revenue in the PMA Group of Day Hospitals, equating to $19.3m. These doctors also hold
  shareholding across 4 of the PMA day hospitals, with several them being shareholders since the
  inception of PMA over 21 years ago. Having invested in Investmed, the doctors have shown that
  they are motivated and encouraged by this opportunity, demonstrating their commitment,
  loyalty and support in PMA and its Management team.

4 RATIONALE FOR THE PROPOSED TRANSACTION
  The funding received from the Proposed Transaction will primarily be used by Advanced Health
  to settle debt and to fund operations.

5 KEY TERMS OF THE PROPOSED TRANSACTION
  The parties are in the process of negotiating a Share Sale and Purchase Agreement (“SPA”) and a
  Shareholders Agreement (“SHA”). Once these agreements have been finalised, the detailed
  terms of the Proposed Transaction, including the effective date and the conditions precedent of
  the Proposed Transaction will be announced on SENS.

  The value of the net assets that are the subject of the Proposed Transaction and the profits
  attributable to the net assets that are the subject of the Proposed Transaction will be included in
  the detailed terms announcement.

6 CATEGORISATION OF THE PROPOSED TRANSACTION

  Based on the current metrics the Proposed Transaction is expected to constitute a category 1
  disposal and related party transaction for Advanced Health in terms of the Listings Requirements
  of the JSE Limited and is therefore expected to be subject to Advanced Health shareholder
  approval.

  The board of directors will procure and obtain the fairness opinion from an Independent Expert,
  as required in terms of the Listings Requirements of the JSE Limited and will distribute the
  category 1 disposal circular to shareholders, including the notice to convene the general meeting,
  in due course, subject to the relevant regulatory approvals being obtained.

7 CAUTIONARY ANNOUNCEMENT

  Given that the SPA and SHA has not been finalised and certain details relating to the Proposed
  Transaction is yet to be formalised, shareholders are advised to exercise caution when dealing in
  the company’s securities until the SPA and SHA has been finalised and the full details are
  announced on SENS.



Johannesburg
26 November 2019

Designated Advisor
Grindrod Bank Limited

Date: 26-11-2019 05:15:00
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.