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AFRICAN OXYGEN LIMITED - PRESS RELEASE - AFROX RE-POSITIONS IN READINESS FOR
SALE OF AFROX HEALTHCARE
African Oxygen Limited
(Incorporated in the Republic of South Africa)
(Registration number 1927/000089/06)
JSE Share code: AFX
ISIN: ZAE000030920
PRESS RELEASE - AFROX RE-POSITIONS IN READINESS FOR SALE OF AFROX HEALTHCARE
27 FEBRUARY 2004
African Oxygen Limited (Afrox) announced today (Friday 27 February) that its
shareholders had approved, by a 99 percent majority, the disposal of its
subsidiary company, Afrox Healthcare Limited (AHealth) to the black economic
empowerment group, Bidco.
With this confirmed as well as AHealth"s Scheme of Arrangement, regulatory
approval from the Competition Tribunal is awaited, and the sanctioning of the
Scheme by the High Court.
Bidco is a company owned by a consortium of black economic empowerment
investors, led by Brimstone Investments (Pty) Ltd and Mvelaphanda Strategic
Investments (Pty) Ltd and Bidco will acquire 75 percent of the issued share
capital of AHealth. Medi-Clinic will subscribe for a minority non-controlling
shareholding of approximately 25 percent. The transaction, once finalised, will
be the biggest black economic empowerment initiative outside the mining
industry.
The Afrox annual general meeting followed the shareholder meeting where chief
executive, Rick Hogben said, "The separation of Afrox and Afrox Healthcare
follows Afrox"s strategy to maximise industrial growth potential. It will also
allow us to broaden our existing industrial market opportunities both locally
and outside of South Africa."
Hogben said, "This year marks our 40th year as a listed company in which time
our annual compound growth has averaged 14,2 percent and we have never cut a
dividend. This year, however, without Afrox Healthcare, Afrox will be a smaller
but more keenly focused company." He confirmed that the company is committed to
continue to provide shareholders with sustained above average growth.
"We continue to focus on understanding customers" needs. Our drive to re-
position the company as a world-class customer-centric supplier will, we are
sure, lead to increased customer loyalty and commitment, and will support our
drive to grow sales in both local and overseas markets."
"We are also reviewing and upgrading our merchandising and marketing. We now
have a specialist retail executive playing a role in upgrading and repositioning
our retail centres, and reviewing their location and concentration."
With the support of BOC"s world-class infrastructure, technology advantage and
global access to markets, Afrox is exporting its own manufactured gas equipment,
industrial products, new medical regulators and an internationally compliant
range of regulators for special gases. The products meet European, Australian
and American standards. Hogben said, "We are intent on growing this business
and expanding our unique export model with BOC as our marketing, sales and
distribution partner."
Referring to the 2003 performance, Afrox chairman, John Walsh said, "During the
2003 financial year revenue increased by 13 percent to R7,3 billion, operating
profit was up 22 percent to R1,1 billion, net profit was up 42 percent to R554
million, and total dividends per share increased by 33 percent to 83 cents. On
a segmental basis our industrial business represents 62 percent of net profit
and the healthcare business 38 percent."
"Corporate governance issues have received considerable prominence. Compliance
with the King II report has increased our focus on standards of performance and
disclosure and I believe our company is well run and has processes and
procedures in place to ensure the highest standards of stewardship," said Walsh.
2003 was a particularly notable year for Afrox. The company received Deloitte &
Touche"s 2003 Good Governance Award for the best-governed company in South
Africa and was also placed first in the Board Effectiveness and Corporate
Integrity and Ethics categories. In addition Afrox"s community involvement was
selected by the United Nations for a case study as an excellent example of an
employee driven, sustainable social development initiative.
The company received the Department of Science and Technology"s Most Outstanding
Technological Innovation for 2003 award in acknowledgement of the AfroxPac 35
self-rescuer for use by underground miners, and NOSA rated Afrox as one of the
top ten companies in South Africa awarding the company a 5-star corporate
rating.
Walsh said, "While it is pleasing to receive awards we do not chase recognition
but we strive to meet our legal and ethical responsibilities because it makes
good business sense. In a similar vein, behavioural policies that were inherent
in the company, and which we view as nation building commitments, have been
cascaded to the entire Afrox team. While many of the concepts contained in the
policies have existed all along, we now have formal guidelines to follow. These
policies reaffirm our commitment to our code of conduct, black economic
empowerment, employment equity, corporate social investment, and our HIV/AIDS
programme."
Hogben concluded by saying, "The parting of the ways with Afrox Healthcare is an
emotive issue. Over the past 20 years many of our people have worked for both
Afrox and Afrox Healthcare and strong friendships have been forged. We are
proud of the performance of Afrox Healthcare which has grown exceptionally,
providing steady revenues for Afrox since the first four hospitals were
acquired, and which is now a R4,5 billion business. We wish all our colleagues
in Healthcare well as they embark on their new path to the future. We have no
doubt they will continue to be a hugely successful company."
Issued by African Oxygen Limited (Afrox)
For further information contact:
Chris Fieldgate
(011) 490 0430
or 082 495 1481
or Ros Beart
(011) 490 0712
or 082 891 5149
Date: 27/02/2004 03:03:21 PM Supplied by www.sharenet.co.za
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