ADVANCED HEALTH LIMITED - Update regarding the Disposal of Advanced Health facillities, proposed capital raise and Cautionary Announcement

Update regarding the Disposal of Advanced Health facillities, proposed capital raise and Cautionary Announcement

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


 UPDATE REGARDING THE DISPOSAL OF ADVANCED HEALTH FACILITIES, PROPOSED CAPITAL
 RAISE AND CAUTIONARY ANNOUNCEMENT


  1. Disposal of Advanced Health facilities
     Shareholders are referred to the detailed terms announcement released on 5 November
     2020, in which it advised that Advanced Health, through its 100% owned subsidiary,
     Advanced Health South Africa Proprietary Limited (“AHSA”) has entered into a sale of shares
     agreement with Samaritan Health Proprietary Limited (the “Purchaser” or “Samaritan”) in
     terms of which Samaritan would purchase AHSA’s ordinary shares and related shareholder
     loans, in seven of the South African hospital facilities in which AHSA’s owns the majority
     interests (“Advanced Health SPVs”) (“Transaction” and “Transaction Agreement”).

      In terms of the Conditions Precedent to the Transaction Agreement, Samaritan’s Due
      Diligence Investigation were to be completed by no later than 29 November 2020 (“Due
      Diligence Completion Date”). Following the Due Diligence Completion Date, the Purchaser
      requested the renegotiation of certain of the Transaction terms, including the funding of the
      Transaction consideration. The board of directors have considered the matter and have taken
      the decision to terminate the Transaction and negotiations.

  2. Disposal of East Rand Day Hospital
     Shareholders are further referred to the detailed terms announcement released on SENS on
     6 November 2020, regarding the sale of Advanced East Rand Day Hospital Proprietary Limited
     (“East Rand Day Hospital”) to 52 Olivia Road Hospital Proprietary Limited (“the Purchaser”)
     in terms of which the business of East Rand Day Hospital would be sold to the Purchaser, as
     a going concern.

      Shareholders are advised that the required funding for the transaction were not raised in
      terms of the conditions precedent to the transaction agreement and as a result, the
      transaction agreement has been terminated.

      East Rand Day Hospital forms part of the underperforming facilities of which the board of
      directors have decided to dispose of as part of the restructuring of the group. The Company
      will continue to pursue the disposal of the underperforming facilities or consider alternative
      solutions on a case by case basis.

   3. Proposed Capital Raise
      The board of directors remains confident in the ability of the remaining South African
      hospital facilities and will continue to pursue a restructuring in order to further reduce
      operational and overhead costs and to inject the necessary cash resources to ensure
      continued solvency and liquidity of the Advanced Health group for the foreseeable future.
       The Company has entered into discussions with the controlling shareholder which has
       committed to underwrite a proposed capital raise of at least R40 million. The discussions are
       ongoing and details of the proposed capital raise will be provided in due course.

   4. Renewal of cautionary announcement
      Shareholders are referred to the renewal of cautionary released on SENS on 5 November
      2020, and are advised that even though the Fourth Tranche of the Credit Facility Agreement
      has been successfully concluded (as was announced on SENS on 8 December 2020) and the
      Transaction with Samaritan referred to in paragraph 1 above has been terminated, the
      proposed capital raise, if concluded successfully, may have a material effect on the price of
      the Company’s securities.

       Accordingly, shareholders are advised to exercise caution when dealing in the Company’s
       securities until further full announcements are made.

Johannesburg
18 December 2020

Designated Advisor
Grindrod Bank Limited

Date: 18-12-2020 04:00:00
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