| Mon 21 Jun 2010, 17:31 | | MDC - Medi-Clinic - Rights Offer Declaration Announcement |
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MDC
MDC
MDC - Medi-Clinic - Rights Offer Declaration Announcement
MEDI-CLINIC CORPORATION LIMITED
Incorporated in the Republic of South Africa
Registration number 1983/010725/06
Share code: MDC
ISIN: ZAE000074142
("Medi-Clinic" or "the Company")
RIGHTS OFFER DECLARATION ANNOUNCEMENT
1. Introduction
Shareholders are advised that the Board of Directors of Medi-Clinic ("the
Board") has resolved to raise equity capital for the Company by way of a rights
offer for an amount of approximately R1.4 billion ("the Rights Offer").
2. Rationale for the Rights Offer
The proceeds of the Rights Offer will be used to finance growth opportunities
available in Switzerland. These growth opportunities present themselves through
expansion projects where capacity constraints or specific market opportunities
exist at a number of hospitals, in particular Klinik Hirslanden in Zurich,
Klinik St. Anna in Luzerne, Clinique Bois-Cerf in Lausanne and other smaller
projects which will enable the Company`s Swiss operations to continue on its
current growth path.
The abovementioned projects will deliver an additional 101 beds, which represent
a 7.4% increase in the existing 1 365 operational beds of the Swiss operations.
In addition to the new beds, a new radiology and radiotherapy centre will be
built at Clinique Bois-Cerf. These projects are mostly long-term in nature which
will individually take up to three years to complete and will only generate
incremental cash flow subsequent to commissioning.
It is desirable that the projects be commenced expeditiously so as not to
compromise the opportunity itself or the quality of service to which the doctors
and patients of the Swiss hospitals are accustomed. Engaging these projects will
place the Swiss operations on a new level for long-term growth and continued
excellence in quality acute hospital care. The expansion projects will provide
attractive returns in excess of the hurdle rate of the Swiss operations.
The Board is of the considered opinion that it would be prudent, in the context
of the above and current debt capital markets, to finance the expansion projects
using equity capital.
3. Terms of the Rights Offer
The Rights Offer will be for a total of 59 301 395 new Medi-Clinic ordinary
shares with a par value of R0.10 each in the authorised and issued share capital
of the Company ("Medi-Clinic Shares") ("Rights Offer Shares") at a subscription
price of 2300 cents per Rights Offer Share in the ratio of 10 Rights Offer
Shares for every 100 Medi-Clinic Shares held by the registered holders of Medi-
Clinic Shares ("Medi-Clinic Shareholders") at the close of trade on the record
date for the Rights Offer, being Friday, 16 July 2010.
Any Rights Offer Shares not taken up in terms of the Rights Offer will be
available for allocation to Medi-Clinic Shareholders who wish to apply for a
greater number of Rights Offer Shares than those offered to them in terms of the
Rights Offer.
The Rights Offer Shares will, upon allotment and issue, rank pari passu with all
other Medi-Clinic Shares in all respects.
4. Underwriting and undertaking to follow rights
Remgro Limited ("Remgro") and Trilantic Capital Partners ("Trilantic")
(collectively "the Committed Shareholders"), collectively directly or indirectly
hold 53.4% of Medi-Clinic`s total issued shares. In terms of an agreement
entered into between Medi-Clinic and each of Remgro and Trilantic, the Committed
Shareholders have agreed to follow their rights pursuant to the Rights Offer,
for a total of 31 664 769 Rights Offer Shares or approximately R728.3 million.
The balance of the Rights Offer has been underwritten by The Standard Bank of
South Africa Limited ("the Underwriter"). In terms of the underwriting agreement
entered into between Medi-Clinic and the Underwriter, the Underwriter agrees,
subject to certain limitations, to subscribe for the Rights Offer Shares that
are not taken up by Medi-Clinic Shareholders in terms of the Rights Offer, up to
27 636 626 Rights Offer Shares or approximately R635.6 million.
5. Pro forma financial effects
The unaudited pro forma financial effects set out below are the responsibility
of the Board and have been prepared to assist Medi-Clinic Shareholders to assess
the impact of the Rights Offer on the Earnings Per Share ("EPS"), Headline
Earnings Per Share ("HEPS"), Net Asset Value ("NAV") per share and Tangible Net
Asset Value ("TNAV") per share of Medi-Clinic. Due to the nature of these pro
forma financial effects, they are presented for illustrative purposes only and
may not fairly present the Company`s financial position or the results of its
operations after the Rights Offer.
The unaudited pro forma financial effects have been prepared in accordance with
the JSE Limited ("JSE") Listings Requirements and the Guide on Pro Forma
Financial Information issued by The South African Institute of Chartered
Accountants. The material assumptions on which the pro forma financial effects
are based are set out in the notes following the table.
Before the Pro forma After the Percentage
Rights adjustments Rights change
Offer1 Offer
EPS (cents) 188.4 (17.7)2 170.7 (9.4)
Diluted EPS 179.0 (16.1) 162.9 (9.0)
(cents)
HEPS (cents) 183.1 (17.2)2 165.9 (9.4)
Diluted HEPS 173.9 (15.6) 158.3 (9.0)
(cents)
NAV per share 1 181.4 101.23 1 282.6 8.6
(cents)
TNAV per share 250.0 189.93 439.9 76.0
(cents)
Ordinary shares 562.9 59.3 622.2 10.5
in issue after
deducting
treasury shares
(million)
Weighted average 561.6 59.3 620.9 10.6
number of
ordinary shares
in issue
(million)
Notes and assumptions:
1. The financial information has been extracted without adjustment from the
published audited financial statements of Medi-Clinic for the year ended 31
March 2010.
2. The pro forma adjustments to the income statement have been calculated on the
assumption that the proceeds from the Rights Offer were received on 1 April
2009.
3. The pro forma adjustments to the statement of financial position have been
calculated on the assumption that the proceeds from the Rights Offer were
received on 31 March 2010.
4. A share issue price of 2300 cents per share has been used for the pro forma
adjustments with 59 301 395 Rights Offer Shares being issued for a total quantum
of R1 330 million, after deducting expenses.
5. Estimated expenses of R34.1 million, relating to the Rights Offer, have been
taken into account in determining the financial effects.
6. Net proceeds are assumed to have been invested for one year in short-term
deposits at an annual interest rate of 0.125% in Switzerland.
7. A Swiss tax rate of 20.45% has been used on the interest impact.
8. The total dividend per share remains the same.
6. Conditions precedent
The Rights Offer is conditional upon the fulfillment of the following conditions
precedent:
- approval being obtained from the JSE of the Rights Offer circular, the listing
of the letters of allocation in respect of all of the Rights Offer Shares and
the listing of the Rights Offer Shares;
- the registration of the letters of allocation, the Rights Offer circular and
other applicable documentation by the Registrar of Companies appointed under the
Companies Act No. 61 of 1973; and
- the applicable approvals being obtained from the South African Reserve Bank in
relation to the Rights Offer.
7. Salient dates and times
Subject to the conditions precedent as set out in paragraph 6 above, the salient
dates and times for the Rights Offer are set out below:
Last day to trade in Medi-Clinic Shares Friday, 9 July 2010
in order to participate in the Rights
Offer (cum entitlement)
Medi-Clinic Shares commence trading ex- Monday, 12 July 2010
entitlement at 09:00 on
Listing of and trading in the letters of Monday, 12 July 2010
allocation on the JSE commences at 09:00
on
Record date for the Rights Offer Friday, 16 July 2010
Rights Offer circular and form of Monday, 19 July 2010
instruction, where applicable, posted to
Medi-Clinic Shareholders
Rights Offer opens at 09:00 on Monday, 19 July 2010
Letters of allocation credited to an Monday, 19 July 2010
electronic account held at the transfer
secretaries in respect of holders of
certificated Medi-Clinic Shares
CSDP or broker accounts credited with Monday, 19 July 2010
entitlements in respect of holders of
dematerialised Medi-Clinic Shares
Last day for trading letters of Friday,30 July 2010
allocation on the JSE
Listing of Rights Offer Shares and Monday, 2 August 2010
trading therein on the JSE commences at
09:00 on
Rights Offer closes at 12:00 on Friday, 6 August 2010
Payment to be made and form of Friday, 6 August 2010
instruction to be lodged with the
transfer secretaries by holders of
certificated Medi-Clinic Shares
Record date for the letters of Friday, 6 August 2010
allocation
Rights Offer Shares issued on or about Tuesday, 10 August 2010
CSDP or broker accounts in respect of Tuesday, 10 August 2010
holders of dematerialised Medi-Clinic
Shares debited with the payment due and
updated with Rights Offer Shares and
share certificates posted to
certificated shareholders by registered
post on or about
Results of the Rights Offer announced on Tuesday, 10 August 2010
SENS
Results of the Rights Offer published in Wednesday, 11 August
the press in South Africa 2010
Issue of new Rights Offer Shares for Thursday, 12 August
excess applications, if applicable 2010
Refund cheques posted to holders of Thursday, 12 August
certificated shares, if applicable, in 2010
respect of excess applications on or
about
Notes:
1. Share certificates in respect of Medi-Clinic Shares may not be dematerialised
or rematerialised between Monday, 12 July 2010 and Friday, 16 July 2010, both
days inclusive.
2. All times are South African times and are subject to change. Any such change
will be published on SENS and in the press in South Africa.
8. Jurisdiction
The shares issued in terms of the Rights Offer and the Rights Offer
documentation will not be registered with the Securities and Exchange
Commission, Washington, D.C., the Canadian Provincial Securities Commission, the
Australian Securities Commission under the Australian Corporation Law, as
amended, or with any authority in any jurisdiction other than South Africa.
Accordingly, the Rights Offer will not be made to or be open for acceptance by
persons with registered addresses in the United States of America or any of its
territories, dependencies, possessions or commonwealths, or in the District of
Columbia, or in the Dominion of Canada, or in the Commonwealth of the United
Kingdom and Australia, their respective states, territories or possessions, or
in any other territory or jurisdiction outside of South Africa where it would be
illegal to make the Rights Offer without compliance with the laws applicable in
such territory or jurisdiction.
9. Further announcement
It is anticipated that the finalisation announcement for the Rights Offer will
be released on SENS on Friday, 2 July 2010 and in the South African press on
Monday, 5 July 2010.
Stellenbosch
21 June 2010
Investment bank, transaction sponsor and underwriter
Standard Bank
Independent sponsor to Medi-Clinic
Barnard Jacob Mellet Corporate Finance (Pty) Ltd
Legal adviser to Medi-Clinic
Cliffe Dekker Hofmeyr Incorporated
Legal adviser to the Underwriter
Bowman Gilfillan Inc.
Independent reporting accountants
PricewaterhouseCoopers Inc.
Date: 21/06/2010 17:31:40 Produced by the JSE SENS Department.
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implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
