| Wed 28 Apr 2004, 12:40 | | Netcare And Harmony Sign Healthcare Deal |
|
Netcare And Harmony Sign Healthcare Deal
Release Date: 28/04/2004 12:26:37 Code(s): HAR NTC
Netcare And Harmony Sign Healthcare Deal
Harmony Gold Mining Company Ltd.
(Co. Reg. No. 1950/038232/06)
ISIN No.: ZAE000015228
JSE Code: HAR
Network Healthcare Holdings Ltd
(Co. Reg. No. 1996/008242/06)
ISIN No.: ZAE000011953
JSE Code: NTC
NETCARE AND HARMONY SIGN HEALTHCARE DEAL
Introduction
Harmony Gold Mining Company Limited ("Harmony") and Network Healthcare Holdings
Limited ("Netcare"), have jointly formed a new company (referred to herein as
"Health-Manco") to manage the provision of healthcare services of the Harmony
Group.
The agreement between Harmony and Netcare forms the first part of a transaction
that will eventually see the complete outsourcing of the management of Harmony"s
healthcare services to Health-Manco.
Health-Manco will oversee the provision of the entire range of healthcare
services to Harmony employees including, inter alia, occupational health,
primary care, hospital management, pharmacy procurement and emergency healthcare
services.
Health-Manco intends to use the next six months as a consolidation period in
which it will familiarise itself with Harmony"s needs, identify areas of
opportunity and implement systems. The intention is to pilot various healthcare
models to focus on cost-effective and quality healthcare delivery that is
comprehensively measured by clinical outcomes. These risk models will ultimately
result in providing quality healthcare services to Harmony employees at an
agreed upon rate.
The parties have already had positive initial discussions with other mining
Groups for the consolidation of healthcare services within the entire mining
sector. The success of this initiative is also expected to be enhanced by the
inclusion of localised industry in making use of this network of mining
hospitals, together with Netcare"s infrastructure.
Rationale
The transaction will bring a wide range of benefits to Harmony, including the
centralisation of Harmony"s healthcare services. This process makes the
provision of these healthcare services easier to manage resulting in a more
efficient and cost-effective delivery of services. Harmony will thereby be
positioned to offer all its employees more comprehensive healthcare benefits.
Netcare, with its integrated healthcare delivery model and full range of
services, is ideally placed to jointly manage the healthcare needs of various
partners, using a range of healthcare models that are able to suit each
company"s needs. With the advent of Netpartner in 2003, the eventual
facilitation of a comprehensive network of healthcare service providers would
also be utilised to assist in providing meaningful, quality healthcare delivery
solutions for both mine employees and their dependants.
The combined participation by Harmony and Netcare is expected to yield
significant benefits through, inter alia, the following factors:
1 Operational efficiencies using;
(i) Consolidation and rationalisation
(ii) Standardisation and economies of scale
(iii) The adoption of benchmarking and best practice principles
2. Pooled management and specialised healthcare expertise;
3. The comprehensive range of services on a national basis;
4. Improved utilisation of Harmony"s hospital assets using Netcare"s brand and
image;
5. Innovation through accessible, affordable new healthcare product options;
6. To offer the currently uninsured employees of the industry and their
dependents access to quality healthcare;
7. Improved quality of care through staff motivation, training, exchange
programmes and retention;
8. Improved social responsibility to communities.
Financial effects
The financial effects of this transaction to both Harmony and Netcare are, at
this stage, not expected to be significant in the immediate future. However,
the successful achievement of the objectives, which includes the potential
rollout of the strategy to the broader mining industry, is expected to yield
meaningful returns to all current and future stakeholders.
Sandton
28 April 2004
Merchant Bank to Harmony
Rand Merchant Bank Corporate Finance
(A division of FirstRand Bank Limited)
Harmony Sponsor Netcare Sponsor
JP Morgan Equities Limited Merrill Lynch South Africa (Pty) Limited
For further information contact:
Netcare
Dr J shevel Telephone 0113010202
Harmony
B Swanepoel Telephone 011 6840140
or
F Dippenaar Telephone 011 6840140
