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NTC
NTC
Netcare - Placing of 47.4 Million new ordinary shares
NETWORK HEALTHCARE HOLDINGS LIMITED
(Registration number 1996/008242/06)
Code: NTC
ISIN number: ZAE000011953
("Netcare" or "the Group")
Placing of 47.4 million new ordinary shares with Investec at R13.01 per
share raising R616.8 million (the "Placing")
Network Healthcare Holdings Limited ("Netcare") announces the placing of
47.4 million new ordinary shares in Netcare at a price of R13.01 per share,
raising R616.8 million pre-expenses. This placement was effected as a
general issue for cash pursuant to the authority obtained by the Company at
its Annual General Meeting held on Friday, 27 January 2006. The shares
represent 2.7% of Netcare`s issued ordinary share capital immediately prior
to the Placing.
The Placing will enable Netcare to reduce borrowings acquired in September
2006 through the acquisition of Netpartner Investments Limited
("Netpartner"). The placing will benefit the shareholders of Netcare as it:
* reduces debt and strengthens the Netcare Group Balance Sheet and,
importantly, the Netcare South African Balance Sheet;
* improves South African financial ratios, in particular debt to equity,
debt to earnings before interest, taxation, depreciation and
amortisation ("EBITDA") and interest cover ratios;
* increases financial flexibility with regard to financing new
investment opportunities and capital expenditure;
* retires complicated and expensive derivative based debt thus adding
value to shareholders and reducing both complexity and forecasting
risk.
Investec Holdings Limited will subscribe for the shares in Netcare and
Netpartner will simultaneously settle its debt obligation to Investec under
a zero cost collar obligation in cash. As a result of these transactions:
* Netcare shareholders` equity increases by R616.8 million;
* Netcare group debt decreases by R616.8 million;
* the number of Netcare shares in issue (net of treasury shares)
increases by 47.4 million shares;
* the Netcare South Africa Debt to Equity ratio improves from 272.9% to
184.8%; and
* the Netcare South Africa Debt to EBITDA ratio improves from 3.4 times
to 3.0 times.
Notably, had Netpartner elected to return 47.4 million Netcare shares
directly to Investec under its zero cost obligations, the effects would be
the same.
Application has been made to the JSE Limited for the listing of the shares
to be issued as a result of the Placing.
P G Nelson
CFO
11 December 2006
Sponsor
Merrill Lynch South Africa (Pty) Ltd
Date: 11/12/2006 16:20:03 Produced by the JSE SENS Department.
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