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Network Healthcare Holdings Limited - Company Announcement
SPECIFIC REPURCHASE OF SHARES
THE REPURCHASE OF SHARES
Network Healthcare Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 1996/008242/06
(Netcare;" or ;the Company)
ISIN code: ZAE000011953
JSE share code: NTC
SPECIFIC REPURCHASE OF SHARES
The Repurchase of Shares
Netcare, through its wholly owned subsidiary, Netcare Hospital Group (Pty)
Limited ("Netcare Hospital Group"), intends, subject to the approval of Netcare
shareholders in General Meeting, to effectively acquire by way of a specific
repurchase of shares, 52,66 million ordinary shares in the share capital of
Netcare (Netcare shares) at a cost of R79,7 million, or an average of 151 cents
per Netcare share ("the specific repurchase"). This compares to the latest
available market price of Netcare shares at 26 November 2002 of 304 cents per
share.
Background
1. During December 2000, Fedsure Life Assurance Limited ("Fedsure") indicated
its intention to dispose of its holding in Netcare shares. In terms of an
existing agreement between Fedsure and the Shevel Consortium, the Shevel
Consortium exercised its pre-emptive rights to acquire 188 million Netcare
shares ("the transaction") from Fedsure at a price of 110 cents per Netcare
share. Shareholders of Netcare were provided with details of the transaction by
way of a circular to shareholders dated 16 February 2001. It was considered at
the time, that the exercise by the Shevel Consortium of its pre-emptive rights
removed a significant overhang on the JSE Securities Exchange South Africa
("JSE") of Netcare shares.
2. To facilitate the transaction the Shevel Consortium procured that the
following purchases of Netcare shares took place at 110 cents per share:
Purchaser Number of Shares (million)
Certain Netcare Directors 55
Netcare Hospital Group (Share Buyback) 55
Basfour 2078 (Pty) Limited (Basfour) 78
188
Netcare shareholders approved the Share Buyback of the 55 million shares by
Netcare Hospital Group at a General Meeting of Netcare shareholders held on 12
March 2001.
3. In placing the 78 million Netcare shares with Basfour (an investment company
owned by PrimeVest Securities (Pty) Limited), the Shevel Consortium negotiated
and secured certain rights for Netcare in respect of a majority of such shares.
Accordingly, the funding for the transaction was structured so that the capital
providers were entitled to benefits in respect of 25,34 million Netcare shares,
while Netcare effectively reserved the right to acquire 52,66 million Netcare
shares for an amount based on the original cost of the shares, as well as
holding and ancillary costs.
Netcare is now seeking shareholder approval at the Annual General Meeting of the
Company scheduled for Friday, 24 January 2003, to implement the specific
repurchase for the benefit of the Netcare Group. The acquisition will be
effective upon the date of approval by shareholders and registration of the
relevant Special Resolution approving the specific repurchase, which is
anticipated to be by the end of January 2003 ("the effective date").
4. The effective cost of the 52,66 million Netcare shares is approximately R79,7
million or 151 cents per Netcare share, which cost is subject to adjustment in
the event of changes to interest rates and Capital Gains Tax liabilities between
26 November 2002 and the effective date.
Funding
The specific repurchase will be funded from the financial resources of the
Netcare Group.
Financial Effects
The table below sets out the financial effects of the specific repurchase on the
attributable earnings, headline earnings, net asset value and tangible net asset
value per Netcare share for the year ended 30 September 2002, and is based on
the following assumptions:
- The total cost in respect of the specific repurchase is R79,7 million;
- The specific repurchase was effective 1 October 2001; and
- An effective funding cost of 15,5% (before tax) was used in determining the
financial effects of the specific repurchase.
Before specific) After specific
repurchase repurchase
(cents) (cents) Change%
Attributable earnings per share 36,4 37,2 2,2
Headline earnings per share 36,7 3 7,5 2,2
Net asset value per share 150,6 150,3 (0,2)
Net tangible asset value per
share 144,4 143,9 (0,3)
Shares in issue (million) 1452,9 1400,2
Notice to Shareholders of Netcare
A Notice of General Meeting, including a circular to shareholders of Netcare
containing information on the specific repurchase, is expected to be mailed with
Netcare`s 2002 Annual Financial Statements within 28 days hereof. The relevant
resolutions to be proposed will be contained within the Notice of Netcare`s
Annual General Meeting scheduled for 10:00 on Friday, 24 January 2003.
By order of the Board
Network Healthcare Holdings Limited
Sandton
29 November 2002
Sponsor
Merrill Lynch South Africa (Pty) Ltd
Registration number 1995/001805/07
Registered Sponsor and Member of the JSE Securities Exchange South Africa
Reporting Accountants
Fisher Hoffman Pkf (Jhb) Inc
Registration Number 1994/001166/21
Chartered Accountants (SA)
Registered Accountants and Auditors
Attorneys
HR Levin Attorneys
Date: 28/11/2002 05:15:00 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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