ADVANCED HEALTH LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2013/059246/06)
(“the Company” or “Advanced Health”)
ISIN Code: ZAE000189049        JSE Code: AVL


    FIRM INTENTION ANNOUNCEMENT REGARDING THE DISPOSAL OF AVL’S ENTIRE EQUITY
      INTEREST OF 56.44% IN PMA AND WITHDRAWAL OF CAUTIONARY ANNOUNEMENT


1 INTRODUCTION AND BACKGROUND TO THE TRANSACTION
  Shareholders are referred to the detailed terms and cautionary announcement released on SENS
  on 23 December 2022 in which shareholders were advised that PresMed BidCo Pty Limited
  entered into a binding Share Sale Agreement (“SSA”) on 23 December 2022 (“Signature Date”)
  to purchase 100% of the shares within PresMed Australia Pty Limited (“PMA”), the Australian
  subsidiary of Advanced Health, from Advanced Health and other PMA shareholders (the
  “Transaction”). PresMed BidCo Pty Limited is an entity owned by ICG Asia Pacific Fund IV (a USD
  1.1 billion fund managed by London Stock Exchange listed Intermediate Capital Group plc (“ICG”))
  and a consortium of management and medical shareholders (the “Consortium”). Pursuant to the
  Transaction, Advanced Health will dispose of 635,274 issued ordinary PMA shares (representing
  its entire equity interest, being 56.44% of PMA’s shares for a total transaction consideration of
  AUD45.2 million (approximately ZAR522.0 million).

  As the Transaction is subject to the provisions of section 112, as read with section 117(c)(i), of
  the Companies Act, 2008 (“the Act”) and the Takeover Regulations of the Takeover Regulation
  Panel (“the TRP” and “the Code”) and, in accordance with the provisions of regulation 90 of the
  Regulations, the Company must retain an independent expert acceptable to the TRP
  (“Independent Expert”) to report on the terms and conditions of the Transaction.

  In accordance with regulations 108(8) and 108(9) of the Code, the board of directors of the
  Company (“the Board”) has therefore constituted a sub-committee of the Board to act as the
  independent board for the purposes of the Transaction, comprising of Messrs. Philip Jack (Phil)
  Jaffe, Dr Wilfred Tommy Mthembu and Ysbrand Jacobus (Cobus) Visser who are independent
  non-executive directors (“the Independent Board”), and the Independent Board have appointed
  BDO Corporate Finance as the Independent Expert. The Independent Expert is in the process of
  preparing a report to the Independent Board for distribution to the Shareholders in terms of
  section 114(3) of the Act and will provide the Independent Board with advice regarding the
  Transaction and make appropriate recommendations to the Independent Board to enable the
  Independent Board to then provide its recommendation to the Shareholders.

  The recommendations of the Board and the Independent Board and the report of the
  Independent Expert will be included in the circular to the Shareholders containing the terms and
  conditions governing the Transaction (“the Circular”) which will be distributed to the
  Shareholders in accordance with the Regulations.

2 RATIONALE FOR THE TRANSACTION
  The ability of the Advanced Health group to continue as a going concern is dependent on the
  directors continuing to procure funding for the South African operations, either through a sale of
  strategic investments or from other capital raising initiatives. The Transaction, which has the
  support of the Advanced Health board, provides the Advanced Health group with an attractive
  opportunity to realise its entire investment in PMA for cash, in order to procure the funding
  required to support the South African operations.

  The Transaction proceeds will initially be applied to restructure the Advanced Health group
  balance sheet by settling outstanding credit facilities and to finance the working capital
  requirements of the remaining South African operations.

3 KEY TERMS OF THE TRANSACTION
  3.1 Share Sale Agreement (“SSA”)
      With regard to Advanced Health’s equity interest in PMA, the Consortium will acquire and
      Advanced Health will sell its entire holding of 635,274 issued ordinary PMA shares
      (constituting 56.44% of the total 1,125,523 issued ordinary PMA shares), together with all
      the rights attached to the PMA shares as at the Effective Date (being 31 October 2022),
      including but not limited to, the right to receive all distributions declared, made or paid in
      respect of the PMA shares on or after the Effective Date.

       The SSA contains a purchase price hold-back mechanism to secure the release of a guarantee
       granted by Epping Surgery Centre Pty. Limited, a subsidiary of PMA (“Subsidiary
       Guarantee”). If the Subsidiary Guarantee is not released before completion of the
       Transaction, the parties have agreed that the Transaction will still complete but that
       approximately AUD2.0 million (ZAR23.3 million) of the Transaction consideration due to
       Advanced Health will be withheld until the Subsidiary Guarantee is released. This held-back
       amount will, therefore, be paid to Advanced Health following completion, upon release of
       the Subsidiary Guarantee.

       Subject to the satisfaction (or waiver, if applicable) of the suspensive conditions set out in
       paragraph 3.3, the Subsidiary Guarantee and certain completion deliverables, Advanced
       Health will receive payment in full on completion (subject to the Subsidiary Guarantee being
       released) with the benefit of a corresponding buyer-side warranty and indemnity insurance
       policy that protects Advanced Health and the other PMA shareholders against historic
       liability for breaches of the warranties and indemnities.

       The SSA further contains legal warranties and indemnities that are considered reasonably
       customary in Australia for a transaction of this nature.

    3.2 Transaction consideration and Cash Confirmation
        The Transaction equates to a 100% PMA equity valuation of approximately AUD80.1 million
        and transaction consideration for Advanced Health’s entire equity interest of AUD45.2
        million (approximately ZAR522.0 million).

        The Consortium will fund the Transaction consideration from available cash resources
        within ICG’s fourth dedicated Asia Pacific fund (Fund IV).

        In compliance with Regulations 111(4) and 111(5) of the Act, the TRP has been provided
        with the unconditional and irrevocable proof of funds (“Cash Confirmation”) issued by
        FirstRand Bank Limited (acting through its Rand Merchant Bank division) for the purposes
        of settling the Transaction Consideration should the Transaction be implemented.

   3.3 Suspensive conditions
       Completion of the sale and purchase of Advanced Health’s shares pursuant to the
       Transaction is conditional on, and will not proceed unless and until, the following
        conditions are satisfied or waived in accordance with the executed SSA, by no later than 30
        April 2023:

       3.3.1 Advanced Health shareholder approval
             The requisite majority of shareholders of Advanced Health approving all ordinary and
             special resolutions required to be passed in terms of section 115 of the Companies
             Act 71 of 2008 (“Companies Act”) and the JSE Limited (“JSE”) Listings Requirements
             to give effect to the Transaction.

       3.3.2 South African Regulatory approvals
             The securing of all approvals, to the extent legally required, from all regulatory
             authorities, including the JSE, the TRP and the South African Reserve Bank (“SARB”),
             (including the issuance of an unconditional compliance certificate having been
             obtained from the TRP in terms of the Companies Act, sections 119 and 121, as read
             with the Companies Regulations including regulation 102(13) or if the compliance
             certificate is issued subject to conditions, such conditions having been fulfilled).

       3.3.3 Consents
             3.3.3.1  Counterparty consents regarding the change in control of the PMA group
                      arising from the Disposal to be obtained in terms of the hospital purchase
                      provider agreements between PMA and the relevant Australian health
                      fund providers and waiver of any right to terminate such agreement; and

               3.3.3.2    Landlord consents regarding the change in control of the PMA group
                          arising from the Disposal to be obtained in terms of the relevant property
                          lease agreements of the PMA group and waiver any right to terminate
                          such agreement.
               the requirement to obtain such consents being a customary condition for a
               transaction of this nature.

4 SHAREHOLDINGS, ACTING AS PRINCIPAL AND CONCERT PARTIES
  The Consortium confirms that they presently own no shares in the Company, that it is the
  ultimate proposed purchaser of the PMA Sale Shares and is not acting in concert with, or as an
  agent or broker for, any other party.

5 IRREVOCABLE UNDERTAKINGS
  The Consortium has been provided with irrevocable undertakings to vote in favour of the
  resolutions required to implement the Transaction by Eenhede Konsultant Proprietary Limited
  and PresMedical Witbank Proprietary Limited, who directly and indirectly hold 68.23% of the
  issued share capital of Advanced Health.

6 CIRCULAR
  The Circular relating to the Transaction, incorporating the terms of the Transaction, the
  Independent Expert’s report, the notice of the General Meeting required to implement the
  Transaction and a form of proxy, will be distributed to Shareholders in due course. The salient
  dates and times in relation to the Transaction will be published on the date of distribution of the
  Circular and will also be contained in the Circular.

7 RESPONSIBILITY STATEMENT
  The Board and the Independent Board of the Company accept responsibility for the information
  contained in this announcement, and certify that, to the best of their respective knowledge and
  belief, the information is true and, where appropriate, this announcement does not omit
  anything likely to affect the importance of the information included.
8 WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
  Shareholders are advised that all details required by the TRP for a Firm Intention Announcement,
  including the Cash Confirmation have now been appropriately disclosed. Accordingly, caution is
  no longer required to be exercised by Shareholders when dealing in the Company’s shares.

  (The Exchange rate applied in this announcement is the closing rate on 22 December 2022 (date
  preceding the Signature Date) AUD:ZAR = 11.5457 (Iress))

Johannesburg
30 January 2023

Corporate Advisor and Independent Designated Advisor to Advanced Health
Grindrod Bank Limited

Transaction and Financial Advisor to Advanced Health
Monash Advisory Pty Ltd

Australian Legal Advisor to Advanced Health
Gilbert + Tobin