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FEDSURE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1969/012384/06)
("Fedsure" or "the company")
Disposal by Fedsure Healthcare (Proprietary) Limited ("Fedsure Healthcare")
of Medicross Healthcare Group (Proprietary) Limited ("Medicross") and its
interest in the Ampath Trust ("Ampath")
1. Introduction
Fedsure shareholders are referred to the circular issued by Fedsure on 30
March 2001 ("the Fedsure disposal circular") in which it was stated that
negotiations for the disposal of, inter alia, Medicross and its 26% interest
in Ampath were at an advanced stage.
Investec Bank Limited is authorised to announce that, subject to the
fulfilment of the conditions precedent set out in paragraph 2.4 below,
agreement has been reached in terms of which Fedsure Healthcare, a wholly-
owned subsidiary of Fedsure, will dispose of Medicross ("the Medicross
disposal") and its 26% interest in Ampath ("the Ampath disposal") to Network
Healthcare Holdings Limited ("the purchaser") for an aggregate disposal
consideration of R227 million ("the disposal consideration"). The Medicross
disposal and the Ampath disposal are collectively referred to as "the
disposals".
2. The disposals
2.1 Nature of business
Medicross is a multi-disciplinary healthcare provider network consisting of
55 Family Medical and Dental Centres (including 12 satellite centres)
located throughout South Africa. Medicross, through its contractual
arrangements with selected service providers, manages and administers a wide
range of primary healthcare services including medical, dental and pharmacy
services as well as operating day clinics.
Ampath conducts business as a provider of specialized facilities and
comprehensive management and administrative services to a network of high
technology laboratories and operations management centres in and around
South Africa.
2.2 Rationale for the disposals
As stated in the Fedsure disposal circular, Fedsure is in the process of
restructuring. The disposals are in line with Fedsure's stated objective of
disposing of its non-core businesses and restructuring the company. The
disposal consideration will be used by Fedsure to reduce net borrowings.
2.3 Terms of the disposals
Fedsure Healthcare will dispose of its interest in Medicross and its
interest in Ampath with effect from 1 April 2001 for the disposal
consideration, which is payable in cash by the purchaser to Fedsure
Healthcare in two tranches, one of R98.5 million on 30 June 2001 in respect
of the Ampath disposal and the other of R128.5 million on 30 October 2001 in
respect of the Medicross disposal.
2.4 The conditions precedent
The disposals are subject to the fulfilment of a number of conditions
precedent including, inter alia, the approval of the Competition Tribunal by
30 October 2001.
2.5 Warranties
The disposals include limited warranties.
2.6 Financial effects
The financial effects set out below are based on the audited results of
Fedsure for the year ended 31 December 2000 after, inter alia, the disposal
by Fedsure ("the Fedsure disposal") of all of its financial services and
insurance businesses to Investec Group Limited ("Investec"), as set out in
paragraph 3.3 of the Fedsure disposal circular ("the pro forma "After"
financial effects").
Based on the pro forma "After" financial effects, the loss per Fedsure share
for the year ended 31 December 2000 was 367,7 cents and the net asset value
per Fedsure share at 31 December 2000 was 2 558,1 cents.
On the assumption that the disposals had been implemented on 1 January 2000
and the disposal consideration was used to reduce the net borrowings of
Fedsure, the disposals would not have had a material effect on the loss per
Fedsure share as set out in the pro forma "After" financial effects for the
year ended 31 December 2000.
On the assumption that the disposals had been implemented on 31 December
2000, the disposals would not have had a material effect on the net asset
value per Fedsure share as set out in the pro forma "After" financial
effects at 31 December 2000.
3. Prospects
Fedsure shareholders are referred to paragraph 5 of the Fedsure disposal
circular in which it was stated that Fedsure is in the process of
restructuring and that various alternatives are being considered regarding
Fedsure's remaining businesses. Further announcements regarding the
restructuring and/or disposal of such remaining businesses as well as
details regarding the initial and subsequent unbundling of the Investec
shares received as consideration for the Fedsure disposal will be made as
and when such information becomes available.
Johannesburg
5 June 2001
Merchant bank
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Attorneys
Cliffe Dekker Fuller Moore Inc
(Registration number 1998/018173/21)
Sponsor
Investec Securities Limited
Member of the JSE
Registration No. 1972/008905/06
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