| Mon 28 Jun 2010, 17:44 | | HSI - Health Strategic Investments Limited - Abridged Pre-Listing Statement |
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JSE
HSI1
HSI - Health Strategic Investments Limited - Abridged Pre-Listing Statement
Health Strategic Investments Limited
(formerly Newshelf 776 (Proprietary) Limited)
(incorporated in the Republic of South Africa)
(Registration number 2005/012471/06)
JSE share code: HSI ISIN: ZAE000146742
("Health" or the "Company")
ABRIDGED PRE-LISTING STATEMENT
Abridged pre-listing statement relating to the listing of Health`s ordinary
shares ("Health shares") on the exchange operated by the JSE Limited ("JSE")
(the "JSE Exchange") as Asset Backed Securities ("ABS") (the "Listing") with
effect from commencement of business on 16 August 2010. The information in
this abridged pre-listing statement has been extracted from the detailed pre-
listing statement issued by Health today, Monday, 28 June 2010.
This abridged pre-listing statement is not an invitation to the public to
subscribe for Health shares, but is issued in compliance with the Listings
Requirements of the JSE for the purpose of providing information to the
public with regards to Health.
1. Introduction and rationale
Mvelaphanda Group Limited ("Mvela Group") and Brimstone Investment
Corporation Limited ("Brimstone") released announcements on 23 April 2010
regarding the disposal of a portion of their interests in Life Healthcare
Group Holdings Limited ("Life Healthcare") pursuant to the listing of the
ordinary shares of Life Healthcare (the "Life Healthcare ordinary shares") on
the JSE Exchange (the "Life Healthcare Listing"). In those announcements,
Mvela Group ordinary and preference shareholders, and Brimstone "N" ordinary
and ordinary shareholders ("Brimstone Shareholders") (collectively, the
"Shareholders") were advised that Mvela Group and Brimstone intended to
undertake a series of internal restructurings ("Restructuring") that would
culminate in the unbundling of all or part of (i) Mvela Group`s indirect
interests in Life Healthcare (the "Mvela Group Health Unbundling"); and (ii)
Brimstone`s indirect interests in Life Healthcare (the "Brimstone Health
Unbundling"), held jointly through Business Venture Investments No 813
(Proprietary) Limited to Mvela Group ordinary shareholders and Brimstone
Shareholders respectively (collectively, the "Participating Shareholders")
(the "Unbundling").
Further to the above announcements, Mvela Group and Brimstone released
announcements on SENS on 22 June 2010 informing the Shareholders of their
intention to effect the Listing and thereafter, subject to shareholder
approval, to implement the Unbundling of Health shares to Shareholders.
The purpose of the Listing and the Unbundling is to:
- enable Mvela Group and Brimstone to unlock the value of Mvela Group`s and
Brimstone`s Life Healthcare investment, as both of these companies are
trading at a discount to the value of their underlying investments;
- allow the Participating Shareholders to trade their indirect interests in
Life Healthcare separately to their Mvela Group ordinary shares or Brimstone
ordinary or "N" ordinary shares, as the case may be; and
- afford all Participating Shareholders the opportunity to retain their
interests in Life Healthcare, instead of having to sell their interests to
comply with mandate restrictions which prevent certain Participating
Shareholders from holding investments in unlisted companies.
2. Important information
The JSE`s approval of the Listing is not to be taken in any way as an
indication of the merits of Health. The JSE has not verified the accuracy and
truth of the contents of the pre-listing statement, or this abridged version
thereof, and, to the extent permitted by law, the JSE will not be liable for
any claim of whatever kind made regarding it.
Claims against the JSE Guarantee Fund may only be made in respect of trading
in the Health shares on the JSE and in accordance with the terms of the rules
of the JSE Guarantee Fund, and can in no way relate to the issue of Health
shares as ABSs by Health.
3. Details of the Listing
The JSE has granted Health approval for the listing of 277 213 378 Health
ordinary shares as follows:
JSE Sector: Investment Products
Abbreviated name: Health
Share code: HSI
ISIN: ZAE000146742
Listing date Monday, 16 August 2010
The JSE has approved the listing of all of the Health shares in issue in the
"Investment Products" sector of the JSE under the name "Health" with effect
from the commencement of business on 16 August 2010, subject to the
fulfilment of the following conditions precedent:
- the passing of the resolutions to approve the Mvela Group Health
Unbundling at the Mvela Group general meeting to be held on 20 July
2010, convened in terms of the notice of general meeting contained in
the circular to the shareholders of Mvela Group, dated 28 June 2010;
- the passing of the resolutions to approve the Brimstone Health
Unbundling at the Brimstone general meeting to be held on 20 July 2010,
convened in terms of the notice of general meeting contained in the
circular to Brimstone Shareholders dated 28 June 2010; and
- the registration of any applicable special resolutions with the
Registrar of Companies in South Africa.
4. Overview of Health
Health, previously Newshelf 776 (Proprietary) Limited, was incorporated and
registered in South Africa on 26 April 2005 as a private company under
registration number 2005/012471/07. On 24 June 2010, Newshelf 776
(Proprietary) Limited changed its name to Health Strategic Investments
(Proprietary) Limited; and on 24 June 2010, the company was converted to a
public company in order to give effect to the Listing. Since incorporation,
the main business of Health has been to act as an investment holding company
for its only asset, its interests in Life Healthcare, and the vehicle through
which Mvela Group has invested in Life Healthcare.
As at the date of listing and following the Restructuring, Health
will(directly or indirectly) hold 277 213 378 Life Healthcare ordinary shares
representing, as at the last practicable date, being Friday, 18 June 2010,
approximately 26.60% of the total issued share capital of Life Healthcare.
The Life Healthcare ordinary shares which will be held by Health after the
Restructuring were acquired in two tranches in February 2005 and September
2006, as part of the Mvela Group, Brimstone and management led buyout of Life
Healthcare.
As required by the JSE, Emerald Panther Investments 52 (Proprietary) Limited
("Manco"), a company held equally by Mvela Group and Brimstone, has
undertaken to fulfil the role of the manager of Health and to render various
management services to Health on the terms and conditions set out in a
management agreement entered into between Manco and Health.
5. Prospects of the Company
The only asset of Health after the Restructuring will be its direct 26.60%
shareholding in Life Healthcare.
Health will not undertake any additional business activities outside of
holding its interest in Life Healthcare, nor will it make any other
investments. Health`s prospects will therefore be wholly dependent on the
performance of Life Healthcare.
Life Healthcare is a leading private hospital operator in South Africa. The
goals of Life Healthcare are to continue providing high quality, cost-
effective healthcare in South Africa, and to become a leading private
hospital operator in other selected emerging markets. In order to achieve
these goals, Life Healthcare is seeking to implement the following key
strategies:
- exploit the breadth and depth of Life Healthcare`s existing hospital
network:
- Life Healthcare has detailed plans to grow the capacity of its existing
facilities in order to meet increased demand and enhance the profitability
and competitiveness of these facilities;
- expand its coverage and penetration of the South African market:
- Life Healthcare plans to expand the geographic reach of its coverage within
South Africa in the acute care hospital sector in order to meet the
increasing demand for private healthcare in South Africa;
- position Life Healthcare for international expansion:
- Life Healthcare plans to take advantage of opportunities to expand within
its existing lines of business in selected attractive emerging markets which
display similar characteristics to those experienced historically in South
Africa;
- continue to enhance operational efficiencies
- Life Healthcare plans to take advantage of its growth to leverage its fixed
cost base and continue to improve margins through a continued focus on
driving efficiencies; and
- ongoing partnership with government and engagement with healthcare reform
in South Africa
- Life Healthcare plans to leverage its position as the leading South African
operator of hospital public private partnerships in connection with future
opportunities to provide services to government.
6. Directors
The names, ages, qualifications, business addresses and occupations of the
directors are set out below. All directors are South African:
Name, age, qualification, and Business address
occupations
MA Brey (56) 1st Floor, Slade House
BCompt (Honours), CA (SA) Boundary Terraces
Non-executive director 1 Mariendahl Lane
(Chairman) Newlands, 7700
LZ Brozin (54) 64 3rd Avenue
BComm, BAcc, CA (SA) Inanda
Non-executive director Sandton, 2196
Y Cuba (32) 1st Floor, 30 Melrose Boulevard,
B.Com (Statistics), B.Com Melrose Arch
(Honours) (Acc), CA(SA) Johannesburg, 2076
Non-executive director
GE Roth (53) 1st Floor, 30 Melrose Boulevard
BCom, BCompt (Honours), Melrose Arch
CA(SA), Johannesburg, 2076
Post-graduate Certificate in
Advanced Tax
Non-executive director
M O`Dea (57) 1st Floor, Slade House
BComm, CA(SA) Boundary Terraces
Company secretary 1 Mariendahl Lane
Newlands, 7700
7. Dividends and other distributions
If Health receives any cash dividend or other cash distribution in respect of
any Life Healthcare ordinary shares held, Health will distribute such amounts
received to the holders of Health shares subject to the provisions of the
Companies Act, 61 of 1973 (as amended or replaced from time to time) and the
Listings Requirements of the JSE and after deducting costs, expenses,
taxation and/or other liabilities payable on or in connection with any
distributions received by Health and/or any borrowings incurred by Health.
8. Liquidation rights
On the winding-up of Health, each Health share shall confer on the holder
thereof the right to a pro rata share in those shares in Life Healthcare held
by Health that remain after payment of the liabilities of Health and the
costs of winding up, subject to the rights of any shareholder to whom Health
shares have been issued on special conditions and subject to Health`s right
to apply set-off against the liability, if any, of Health shareholders for
unpaid capital or premium. Health shares are the only class of shares in the
share capital of Health and therefore do not rank subordinate to any other
shares on a winding up.
9. Restrictions on disposal of Life Healthcare ordinary shares
Pursuant to the undertaking by the shareholders of Life Healthcare, including
Brimstone and Mvela Group, given prior to the Life Healthcare Listing, not to
dispose of their Life Healthcare ordinary shares or their interests in such
shares for a period of 180 days after the Life Healthcare Listing (the "Life
Healthcare lock-in period"), Health is not permitted to dispose of its
current interest in Life Healthcare until the expiry of the Life Healthcare
lock-in period. It is the intention of the directors of Health to unbundle
Health`s Life Healthcare ordinary shares to Health shareholders following the
expiry of the Life Healthcare lock-in period.
10. Historical financial information
The historical financial information of Health set out below has been
extracted from the audited annual financial statements of Health for the
years ended 30 June 2008 and 2009 and interims for the six months ended 31
December 2009.
STATEMENT OF FINANCIAL POSITION
At At 30 June At 30 June
31 December 2009 2008
2009
R R R
Assets
Non-current assets
Strategic investment 2 074 423 086 1 811 878 920 1 407 586 639
Loans receivable 267 849 131 198 291 719 170 116 188
Total assets 2 342 272 217 2 010 170 639 1 577 702 827
Equity and
liabilities
Capital and reserves 1 578 144 619 1 341 149 884 1 002 703 381
Share capital 100 100 100
Accumulated profit 1 578 144 519 1 341 169 784 1 002 703 281
Non-current 712 900 021 617 793 178 523 771 869
liabilities
Long term borrowings 423 387 305 365 036 645 327 616 254
Deferred taxation 289 512 716 252 756 533 196 155 615
Current liabilities 51 227 577 51 227 577 51 227 577
Trade and other 712 500 712 500 712 500
payables
Amounts payable to 50 515 077 50 515 077 50 515 077
group companies
Total equity and 2 342 272 217 2 010 170 639 1 577 702 827
liabilities
Number of 100 100 100 100
ordinary shares
in issue
Net asset value 1 578 145 1 341 150 1 002 703 1 018 145
per ordinary
share (cents)
Net tangible 1 578 145 1 341 150 1 002 703 1 018 145
asset value per
ordinary share
(cents)
Statement of comprehensive income
For the six At 30 June At 30 June
months ended 2009 2008
31 December
2009
R R R
Dividend income 69 557 412 28 175 530 -
Revaluation of 262 544 166 404 292 281 26 621 614
investment
Finance charge (58 350 660) (37 420 390) (45 208 021)
Profit/(Loss) before 273 750 918 395 047 421 (18 586 407)
taxation
Taxation (36 756 183) (56 600 918) 3 145 131
Profit/(Loss) for 236 994 735 338 446 503 (15 441 276)
the year
Weighted average net 100 100 100
number of ordinary
shares in issue
(000)
Diluted weighted 100 100 100
average net number
of ordinary shares
in issue (000)
Earnings per 236 995 338 447 (15 441)
ordinary share
(cents)
Headline earnings 236 995 338 447 (15 441)
per ordinary share
(cents)
Diluted earnings per 236 995 338 447 (15 441)
ordinary share
(cents)
Diluted headline 236 995 338 447 (15 441)
earnings per
ordinary share
(cents)
11. Material change
There has been no material change in the financial or trading position of
Health since the last financial statements or unaudited interim reports have
been published.
12. Litigation statement
There are no legal or arbitration proceedings, which may or have during the
12 months preceding the date of the pre-listing statement, had a material
effect on the financial position of Health. Health is not aware of any
proceedings that would have a material effect on the financial position of
the Company.
13. Copies of the pre-listing statement
The pre-listing statement is only available in English and copies thereof may
be obtained during normal business hours between Monday, 28 June 2010 and
Monday, 16 August 2010 at the registered offices of Health, Rand Merchant
Bank, Mvela Group, Brimstone and at the offices of the transfer secretaries,
at their respective physical addresses which appear below:
The registered office of Health: The registered office of Rand
1st Floor, Slade House Merchant Bank:
Boundary Terraces 1 Merchant Place
1 Mariendahl Lane Cnr Rivonia Road and Fredman
Newlands, 7700 Drive
Sandton
Johannesburg
2196
The registered office of The registered office of Mvela
Computershare Investor Group:
Services(Proprietary) Limited 1st Floor
Ground Floor 30 Melrose Boulevard
70 Marshall Street Melrose Arch
Johannesburg Johannesburg, 2076
2001
The registered office of
Brimstone:
1st Floor, Slade House
Boundary Terraces
1 Mariendahl Lane
Newlands,7700
Johannesburg
28 June 2010
Merchant Bank, structuring advisor and sponsor
RAND MERCHANT BANK (a division of FirstRand Bank Limited)
Attorneys to Mvela Group and Health
Bowman Gilfillan Inc
Attorneys to Brimstone and Health
Edward Nathan Sonnenbergs Inc
Reporting accountants and auditors
PKF (Jhb) Inc
Transaction advisor to Mvela Group and Health
Afropulse Group (Proprietary) Limited
Transaction advisor to Brimstone and Health
Nedbank Capital, a division of Nedbank Limited
Independent reporting accountants and auditors to Life Healthcare
PricewaterhouseCoopers Inc.
Date: 28/06/2010 17:44:24 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
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.
