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Afrox Healthcare: Agreement reached between Afrox, Bidco and Medi-Clinic

Release Date: 30/11/2004 15:01
Code(s): AFX MDC AHH
Wrap Text

Afrox Healthcare: Agreement reached between Afrox, Bidco and Medi-Clinic relating to proposed merger Afrox Healthcare Limited Business Venture Investments No. 790 (Incorporated in the Republic of (Proprietary) Limited South Africa) (Incorporated in the Republic of South (Registration number: Africa) 1985/001313/06) (Registration number: 2003/002733/07) Share code: AHH ("Bidco") ISIN: ZAE000022059 ("Ahealth") African Oxygen Limited Medi-Clinic Corporation Limited (Incorporated in the Republic of (Incorporated in the Republic of South South Africa) Africa) (Registration number 1927/000089/06) (Registration number: 1983/010725/06) JSE Share code: AFX Share code: MDC NSX Share code: AOX ISIN: ZAE000004370 ISIN: ZAE000030920 ("Medi-Clinic") ("Afrox") JOINT ANNOUNCEMENT BY AHEALTH, BIDCO, AFROX AND MEDI-CLINIC ON AGREEMENT REACHED RELATING TO THE PROPOSED MERGER BETWEEN AHEALTH AND BIDCO Shareholders are referred to the proposed merger between Ahealth and Bidco (a company jointly controlled by Brimstone Investment Corporation Limited ("Brimstone") and Mvelaphanda Strategic Investments (Pty) Ltd ("Mvelaphanda"), and in which Medi-Clinic holds a 25% shareholding) by way of a scheme of arrangement in terms of Section 311 of the Companies Act, 1973 ("the scheme"). Shareholders of Afrox are further referred to the Category 3 announcement of Afrox to be published simultaneously with the publication of this joint announcement. Shareholders are advised that for purposes of facilitating this important black economic empowerment ("BEE") transaction in the South African private hospital industry, Afrox, Brimstone, Mvelaphanda, Bidco and Medi-Clinic have reached agreement on 30 November 2004 on the manner in which the proposed merger should proceed ("the agreement"). Background Medi-Clinic participated in the formation of Bidco, which intended that meaningful BEE could be facilitated in the South African private hospital sector if the sale of Ahealth took place in two separate transactions: the acquisition of Ahealth by Bidco and the subsequent purchase of some of the Ahealth hospitals from Bidco by Medi-Clinic, to balance commercial and BEE goals with acceptable financial risk. New funding options now being pursued by Bidco, will, if successful, enable Bidco and its BEE shareholders to acquire Ahealth without the financial backing of Medi-Clinic. Given the new funding options now being pursued and Medi- Clinic"s wish to further the cause of BEE, the parties have agreed that Medi- Clinic will enable the BEE companies in Bidco (Brimstone and Mvelaphanda) to pursue the acquisition of Ahealth without any Medi-Clinic participation. Terms of the Agreement In terms of the agreement - Medi-Clinic disposed of its 25% shareholding in Bidco to Afrox, with immediate effect; the shareholders agreement between Brimstone, Mvelaphanda and Medi-Clinic in respect of Bidco has been cancelled, with immediate effect, and has been replaced by a shareholders agreement in respect of Bidco between Brimstone, Mvelaphanda and Afrox; the disposal agreement in terms of which Medi-Clinic was to acquire a number of Ahealth hospitals from Bidco after the implementation of the proposed merger has been cancelled, with immediate effect; Medi-Clinic shall on the operative date of the proposed merger be paid an amount of R50 million in consideration for the cancellation of the aforementioned two agreements; and Bidco refunded all of Medi-Clinic"s transaction costs to date. Afrox, Ahealth and Bidco have further extended the date for fulfilment of the suspensive condition of the scheme that the Competition Tribunal approves the proposed merger ("the Competition Condition") from 31 December 2004 to 23 January 2005. If by 23 January 2005 Afrox, Bidco, Brimstone and Mvelaphanda have procured the release of Medi-Clinic from its guarantee to ABSA Bank Limited, and by virtue thereof ABSA Bank Limited has agreed to such extension, the date for fulfilment of the Competition Condition will automatically be extended to 31 March 2005 in order for the Competition Tribunal hearing to be resumed and finalised. If by 23 January 2005 the release of Medi-Clinic from its guarantee to ABSA Bank Limited has not been procured, the scheme shall lapse in terms of its tenor. Afrox, Brimstone, Mvelaphanda and Bidco are working towards procuring the release of Medi-Clinic from its guarantee to ABSA Bank Limited and the replacement of it with permanent funding for the transaction by 23 January 2005. Johannesburg 30 November 2004 Sponsor to Afrox Sponsor to Medi-Clinic Barnard Jacobs Mellet Rand Merchant Bank Corporate Finance Sponsor to Ahealth Nedbank Capital Date: 30/11/2004 03:01:03 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department

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