| Fri 28 Apr 2006, 12:39 | | Medi-Clinic Corporation Limited - Acquisition Of I |
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MDC
MDC
Medi-Clinic Corporation Limited - Acquisition Of Interest In A Private
Healthcare Group In Dubai
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")
ACQUISITION OF INTEREST IN A PRIVATE HEALTHCARE GROUP IN DUBAI
1. Introduction
Medi-Clinic is pleased to announce that it has entered into an agreement for the
acquisition of a 49% interest in Emirates Healthcare Holdings Limited ("Emirates
Healthcare"), the ultimate healthcare holding company of the Varkey Group, a
Private Healthcare Group based in Dubai, United Arab Emirates ("UAE") ("the
proposed Transaction").
2. Background and rationale
2.1 As part of its strategic intention of expanding its business
internationally, Medi-Clinic continuously evaluates investment opportunities in
other parts of the world, and has evaluated a number of opportunities in the
UAE.
2.2 The Varkey Group, owned by Sunny Varkey, has extensive business interests
in education, including a number of private schools and in healthcare, which
includes the successful 120-bed Welcare Hospital, one ambulatory care centre
and two clinics all in Dubai. It also has the rights to develop two new
hospitals in the new Dubai Healthcare City as well as five related clinics. The
Varkey Group has an existing strategic relationship with GEII International Inc,
a member of the General Electric Group, ("GE"), and is well positioned for
further growth in the UAE and adjoining regions.
2.3 In order to facilitate such expansion along with the introduction of Medi-
Clinic and GE as investors, Emirates Healthcare has been formed as the ultimate
holding company of the Varkey Group healthcare interests and any further
healthcare interests that may be developed or acquired.
2.4 The UAE and surrounding regions appear to have much potential for further
growth in the private healthcare sector. Medi-Clinic believes that in Sunny
Varkey and GE it has good partners with which to build an expanded private
hospital business from the existing Welcare platform. The relationship between
Medi-Clinic and the Varkey Group also offers the potential for Medi-Clinic to
export its existing expertise and broadens the career opportunities available to
its staff within Medi-Clinic associated companies.
3. The proposed Transaction
3.1 The terms of the proposed Transaction are recorded in a shareholders
agreement entered into between Sunny Varkey, Medi-Clinic Middle East
(Proprietary) Limited ("Medi-Clinic Middle East") and GE on 26 April 2006 (the
Agreement).
3.2 In terms of and pursuant to the Agreement: -
3.2.1 Medi-Clinic Middle East will subscribe for a 49% equity interest
in Emirates Healthcare for an amount of US$46.4 million;
3.2.2 GE will subscribe for a 7,39% equity interest in Emirates
Healthcare for an amount of US$7.0 million;
3.2.3 Sunny Varkey will retain an equity interest in Emirates
Healthcare of 43,61%;
3.2.4 the Sunny Varkey and GE equity interests will be pooled such that
Sunny Varkey retains control of Emirates Healthcare; and
3.2.5 the parties will endeavour to secure a further strategic equity
investor holding an equity interest of approximately 22.75% in the operating
subsidiary of Emirates Healthcare which, if implemented, will dilute the above
effective shareholdings in the healthcare business proportionately but not their
interest in Emirates Healthcare.
3.3 The Agreement contains such provisions as are typically contained in
shareholders agreements, including extensive minority protections for the non-
controlling shareholders. The Agreement provides for Medi-Clinic Middle East to
have extensive influence over and involvement in the management and affairs of
Emirates Healthcare.
3.4 The Agreement is subject to the fulfilment of several suspensive
conditions, including the finalisation of an internal reorganisation required in
order to constitute Emirates Healthcare in the agreed form, and the finalisation
of debt financing arrangements for the completion of the development of the two
new hospitals and five clinics proposed to be developed by the Varkey Group, to
the satisfaction of Medi-Clinic Middle East and GE, by not later than 30 June
2006.
3.5 The proposed Transaction will be implemented, and payment made, once all
such suspensive conditions have been fulfilled.
3.6 Medi-Clinic has received exchange control approval for the making of the
investment.
Stellenbosch
28 April 2006
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 28/04/2006 12:39:16 PM Produced by the JSE SENS Department
