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ADVANCED HEALTH LIMITED - EFFECTIVE DISPOSAL OF 3.8% OF PRESMED AUSTRALIA (PTY) LIMITED

Release Date: 19/06/2018 10:49
Code(s): AVL     PDF:  
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EFFECTIVE DISPOSAL OF 3.8% OF PRESMED AUSTRALIA (PTY) LIMITED

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


EFFECTIVE DISPOSAL OF 3.8% OF PRESMED AUSTRALIA (PTY) LIMITED


1    INTRODUCTION

     Shareholders are advised that Advanced Health’s (“AVL”) major Australian subsidiary,
     Presmed Australia (Pty) Limited (“PMA”) conducted a fund raising to raise AUD 1.675 million
     (ZAR 16.74 million) by way of loans from certain PMA and Advanced Health directors or their
     associated companies (the “Parties”). A portion of the loans were converted to equity at a
     share price of AUD23.37 per PMA share which diluted Advanced Health’s shareholding in PMA
     from 94.64% by 3.8% to 90.84%, which is a disposal in terms of the Listings Requirements of
     the JSE Limited. (the “Disposal”). The Parties who participated in the conversion are listed in
     4.1 below.

2    BACKGROUND TO PMA

     Presmed Australia is one of the leading healthcare companies in Australia that specializes in
     establishment and management of surgical day hospitals. It currently operates five facilities
     across the major urbanised regions New South Wales, Australia.

3    BACKGROUND AND RATIONALE FOR THE DISPOSAL

     Further to the August 2017 rights issue in AVL, the AVL Board considered it preferable that
     the funds raised should be retained for the ongoing growth of the South African day hospital
     business. Concurrently, PMA required funding for its ongoing expansion and support of its
     Australian day hospitals, which was approved and supported by the AVL Board.

4    KEY TERMS OF THE TRANSACTION

     4.1 Conversion of loans to share capital
          PMA raised a total of AUD 1.675 million of which AUD 0.75 million (ZAR 7.5 million) was
          allocated for the issuance of new shares in PMA (resulting in the 3.8% dilution) and the
          remaining AUD 0.925 million (ZAR 9.24 million) being retained by PMA as long term
          loans. The details for each of the Parties are set out below:

            Party and associate company                  Total Loan Amount   Converted to   Long term loan
                                                                             Shares
            Ysbrand Visser via Maluti Holding AG         AUD 300 000         AUD 150 000    AUD 150 000
            Johan Oelofse                                AUD 300 000         AUD 300 000    -
            Marc Resnik via Kinser Investments Pty Ltd   AUD 75 000          AUD 75 000     -
            Alan Flax via Talocave Pty Ltd               AUD 100 000         AUD 100 000    -
            Ivan Kassel via Davilar Pty Ltd              AUD 500 000         AUD125 000     AUD 375 000
            Carl Grillenberger                           AUD 400 000         -              AUD 400 000
            Total                                        AUD 1 675 000       AUD 750 000    AUD 925 000

     4.2 Conversion of loans to share capital
         The long term loans will attract an interest rate of 5.5% per annum and are repayable in
         cash at the end of a two or three year period, with the Parties having the option to
            request the conversion of the outstanding long term loans to shares, subject to consent
            by PMA, at the time of the request and at a subscription price to be determined by PMA.

            Should the Parties request and PMA approve the future conversion of the long term
            loans it may lead to further dilutions of Advanced Health’s shareholding in PMA. Had the
            full AUD 1.675 million been converted to PMA shares, the maximum dilution of Advanced
            Health’s shareholding would have been 8.09%.

      4.3 Use of proceeds by PMA
          PMA is utilising the funds raised for its ongoing expansion and support of its Australian
          day hospitals, creating a stable and strong platform for each facility, and to have the
          financial ability to grow the business. Part of the funds raised has also been used to pay
          back current bank loans, which attracted a higher interest rate.

      4.4 Suspensive conditions
          There are no suspensive conditions to the Disposal.

      4.5 Effective date of the Disposal
          The effective date of the Disposal is on the day the shares are issued to the Parties which
          is expected to be on or about 22 June 2018.

5     PROFIT AND NET ASSET VALUE ATTRIBUTABLE TO PMA

      The net assets of PMA, as per the audited financial statements for the 12 months ended 30
      June 2017 (as restated for the change in segment reporting*) was ZAR120.821 million. The
      audited revenue attributable to the net assets of PMA for the 12 months ended 30 June 2017
      was ZAR218.794 million and the profit after tax was ZAR1.177million. The audited financial
      statements were prepared in accordance with International Reporting Standards, the SAICA
      Financial Reporting Guides as issued by the Accounting Practices Committee, the JSE Listing
      Requirements and the Companies Act 71 of 2008 of South Africa.

      *As reported in the unaudited condensed consolidated interim financial statements for the 6
      months ended 31 December 2017, released on SENS on 1 March 2018

6     CATEGORISATION OF THE TRANSACTION AND CAUTIONARY ANNOUNCEMENT

      In terms of the Listings Requirements of the JSE, the Disposal, at a value of AUD0.75 million is
      not categorised as a transaction in terms of section 9. However, given the option set out in 4.2
      above, had the full value AUD1.675 million been converted to PMA shares, the Disposal would
      be categorised as a category 2 transaction. Further, the Disposal is not categorised as a related
      party transaction for AltX issuers and therefore it is not subject to Advanced Health
      shareholder approval.

The Exchange rate applied in this announcement is the closing ZAR:AUD rate on Friday, 15 June 2018 of ZAR9.9934:AUD1

Johannesburg
19 June 2018

Designated Advisor
Grindrod Bank Limited

Date: 19/06/2018 10:49:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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