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Netcare - Transaction relating to the unwinding of the Netcare / Netpartner
Cross Shareholding
Network Healthcare Holdings Limited
Incorporated in the Republic of South Africa
Registration number 1996/008242/06
JSE Code: NTC & ISIN: ZAE000011953
("Netcare")
Netpartner Investments Limited
Incorporated in the Republic of South Africa
Registration number 2003/014215/06
("Netpartner")
TRANSACTION RELATING TO THE UNWINDING OF THE NETCARE / NETPARTNER CROSS
SHAREHOLDING
1. INTRODUCTION
Further to the announcement dated 23 March 2006 ("the terms announcement")
relating to transactions which, if implemented, will result in, inter alia:
* the cross shareholding structure which currently exists between
Netcare and Netpartner (the "Companies") being unwound; and
* Netpartner facilitating the acquisition of medical scheme
administration assets via one of Netpartner"s wholly-owned
subsidiaries ("PurchaseCo") which, it is intended, will become
a public company traded on the Barnard Jacob Mellet over the counter market.
(collectively "the unwinding transactions")
Shareholders of both Netcare and Netpartner are advised that the sale by Netcare
of its 46,3% shareholding in PurchaseCo to third parties ("the transaction") as
one of the proposed transactions referred to in the terms announcement has been
concluded subject to the successful completion of certain conditions precedent,
which include the completion of all of the unwinding transactions.
Subsequent to the terms announcement PurchaseCo was established and named
Lethimvula Investments Limited ("Lethimvula").
2. NATURE OF THE TRANSACTION
As part of the unwinding transactions it is intended that Netpartner will effect
a distribution in specie of its shares in Lethimvula, including to Netcare. As
part of the unwinding transactions Netcare undertook to dispose of all or part
of its 46.3% interest in Lethimvula immediately after the distribution in specie
of Lethimvula shares by Netpartner.
In anticipation of the distribution in specie of the Lethimvula shares by
Netpartner, Netcare has, subject to the various conditions precedent in the
relevant agreement as well as those set out in the terms announcement, disposed
of its 46.3% interest in Lethimvula. Lethimvula is a wholly-owned subsidiary of
Netpartner which, as set out in the terms announcement, intends acquiring 100%
of the shares in and claims against the medical scheme administrators, Medscheme
Limited and Rowan Angel (Proprietary) Limited.
3. THE ACQUIRING PARTIES
Following a process whereby an independent corporate adviser was appointed to
provide financial advisory services through a structured bidding process in
relation to the disposal by Netcare, the parties below have entered into an
agreement whereby they each intend to independently acquire portions of
Netcare"s 46.3% interest in Lethimvula.
The successful bidders ("the parties") are:
Golden Pond Trading 175 (Proprietary) Limited, a company representing the South
African Medical and Dental Practitioners Association (SAMDP) which consists of a
group of more than 3 000 black doctors;
Community Healthcare Holdings Limited ("Community"), a 100% black owned
investment holding company with investments within the key areas of healthcare
and technology. Community forms part of the Community Investment Holdings
(Proprietary) Limited Group, which has interests in, inter alia, technology,
logistics, healthcare and mining. The group operates predominantly in sub-
Saharan Africa.
Newshelf 755 (Proprietary) Ltd (Newshelf), a company controlled by the Africa
Vanguard Capital Consortium ("AVC"), a broad-based empowerment consortium led by
Mr Sandile Zungu. The shareholders of Newshelf are made up of AVC, Thulong
Investment Group (Pty) Ltd, The Africa Vanguard Social Development Trust, The
National Association of People living with HIV/AIDS ("NAPWA") and Alchemy Health
Options (Pty) Ltd;
Bophelo Investments (Proprietary) Ltd ("Bophelo"), a company representing the
South African Managed Care Cooperation ("SAMCC"). The SAMCC comprises a
voluntary membership of 3 500 doctors and is a fully registered and duly
constituted co-operative, embodied into a fully Broad-Based Black Economic
Empowerment ("BBBEE") compliant National General Practitioner ("GP") Network
with experience in the medical environment dating back to 1995. The SAMCC
comprises regional independent practitioners association"s ("IPA"s"), themselves
formed by individual doctors, of whom more than 60% are historically
disadvantaged individuals; and
Manco, a company to be formed to hold the interests of key executive management
from the SAMDP and Community.
Upon successful completion of all of the conditions relating to the unwinding
transactions, Lethimvula shareholders will comprise of a broad-based grouping of
empowerment parties and industry stakeholders who collectively have significant
experience in the healthcare industry.
4. INDICATIVE SHAREHOLDING IN LETHIMVULA - POST THE NETCARE DISPOSAL
Based upon the following shareholding analysis, and the fact that in the order
of 70% of the shares in Lethimvula will be held directly or indirectly by
individuals from previously disadvantaged communities ("PDC"s"), this
transaction will result in Lethimvula being the largest black owned multi-scheme
healthcare administrator and health risk manager in South Africa.
%
(Note 1)
Golden Pond Trading 175(Proprietary) Limited 23.4
Community Healthcare Holdings Limited 23.4
Newshelf 755 (Proprietary) Ltd 9.0
Bophelo Investments (Proprietary) Ltd 2.7
Manco 4.6
+/- 9 000 public shareholders (note 2) 36.9
Notes
Prior to any additional purchases of shares in the event of a potential
mandatory offer as referred to in clause 5 below.
Includes existing Netpartner shareholders, more than 3 200 of whom are from
PDC"s, who will receive Lethimvula shares as part of the distribution in specie
by Netpartner. As stated in the terms announcement, it is intended that
Lethimvula will become a public company traded on an over the counter market.
5. SECURITIES REGULATION PANEL (SRP)
In the process of finalising the transaction the parties are mindful of their
responsibilities in terms of the Securities Regulation Code on Takeovers and
Mergers ("the Code"). Accordingly, as this transaction may constitute an
affected transaction as defined in the Code, an offer may be required to be made
to the remaining shareholders of Lethimvula, ("mandatory offer"). The affected
parties have undertaken to make the mandatory offer (if required). Accordingly
Netpartner shareholders are advised to exercise caution when dealing in the
company"s securities until a further announcement is made in this regard.
6. DOCUMENTATION
Circulars to the shareholders of both Netcare and Netpartner, containing the
full details of the unwinding transactions, incorporating notices convening:
- the general meetings; and
- the scheme meeting relating to the scheme of arrangement in terms of
section 311 of the Companies Act, No. 61 of 1973, ass amended (the
"scheme") which has been proposed by Netcare between Netpartner and its
shareholders other than Netcare, together with forms of proxy, are intended
to be posted to the respective shareholders during the last week in May or
first week in June 2006.
In the event that the scheme is not proposed, or is not sanctioned by the High
Court of South Africa (Witwatersrand Local Division) for any reason, Netcare
will make a substitute offer to the shareholders of Netpartner on the same terms
and conditions as those proposed for the scheme (the "substitute offer").
Netcare intends to invoke the provisions of section 440K of the Companies Act,
should at least nine-tenths of shareholders of Netpartner (excluding Netcare)
accept the substitute offer.
A further announcement will be made in due course containing, inter alia,
further details of the scheme and the salient dates applicable to the unwinding
transactions will be made in due course.
10 May 2006
Johannesburg
Merrill Lynch South Africa (Proprietary) Limited
Lead sponsor to Netcare
PricewaterhouseCoopers Corporate Finance ("PwC-CF")
Financial adviser regarding the disposal by Netcare
KPMG Services (Proprietary) Limited
Corporate Adviser to Netcare
HR Levin Attorneys Notaries and Conveyancers
Webber Wentzel Bowens
Legal Advisers to Netcare
Nedbank Capital, division of Nedbank Limited
Investment Bank, Independent Corporate Adviser and Transactional Sponsor to
Netpartner
i capital advisers (Proprietary) Limited
Corporate Adviser to Netpartner
Cliffe Dekker Inc.
Legal Adviser to Netpartner
Date: 10/05/2006 05:04:18 PM Supplied by www.sharenet.co.za
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