ADVANCED HEALTH LIMITED - Renewal of Cautionary Announcement

Renewal of Cautionary Announcement

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


RENEWAL OF CAUTIONARY ANNOUNCEMENT


  Shareholders are referred to the renewal of cautionary announcement released on SENS on 18
  December 2021 and are advised of the following updates relating to the Company.

  1. Disposal of Advanced Vergelegen Surgical Centre Proprietary Limited
     Shareholders are referred to the detailed terms announcement released on SENS on 28
     January 2021, regarding the sale of Advanced Vergelegen Surgical Centre Proprietary Limited
     (“Vergelegen”) to Hibosys Proprietary Limited, operating as Summerhill Surgical Centre (“the
     Purchaser”) in terms of which the Business of Vergelegen will be sold to the Purchaser, as a
     going concern.

      Vergelegen forms part of the underperforming facilities of which the board of directors has
      decided to dispose of as part of the restructuring of the group.

   2. Restructuring process
      As part of the restructuring process, the Advanced Health group have implemented strict
      measures in South Africa to ensure that all costs are substantially curtailed. A decision has
      been made to close the Advanced Soweto Day Hospital Proprietary Limited, which was
      bleeding a substantial portion of cash resources and not showing any sign of an
      improvement. Most of the remaining South African operating subsidiary companies have
      grown to the extent that most of these companies are now cashflow positive.

   3. Operational update
      The operations of Presmed Australia Proprietary Limited (“PMA”) (in which Advanced Health
      currently owns 59.66%), have exceeded expectations over the first two quarters of the
      financial year ending 30 June 2021. PMA produced record high patient numbers for the
      period. This is primarily due to the large backlog of patients who could not be operated on
      during the year ended 30 June 2020, due the COVID-19 restrictions. These results could not
      have been predicted during these unprecedented times and provide a positive indication of
      the potential that exists for the South African facilities.

       The objective going forward is to ensure that the South African business will achieve a cash-
       flow breakeven position before the end of June 2021. Although the South African operations
       have disappointed in the past by not showing the expected returns, we believe that this part
       of our business is now in a stronger position to make a positive contribution towards the
       continued growth of Advanced Health in the future. Advanced Health has secured
       favourable Designated Service Provider (‘DSP’) contracts with medical schemes, for 2021.
       This should help to secure better patient volumes for the South African facilities of Advanced
       Health. Furthermore, the group will continue to reduce operational costs and substantially
       strengthen its cash resources to turn the remaining facilities into viable business ventures
       and to ensure the continued solvency and liquidity of the Advanced Health group for the
       future.

   4. Proposed Capital Raise
      As previously advised, the board of directors remains confident in the ability of the remaining
      South African hospital facilities and will continue to pursue a restructuring strategy in order
      to further reduce operational and overhead costs and to inject the necessary cash resources
      to ensure continued solvency and liquidity of the Advanced Health group for the foreseeable
      future.

      To achieve these objectives, Advanced Health is planning a non-renounceable rights offer to
      raise a minimum of R40 million and a maximum of R67 million. Advanced Health’s controlling
      shareholder has agreed to underwrite R40 million of the planned rights offer. The price, at
      which the rights offer will be made is 24 cents per share, which represents a discount of less
      than 10% to the weighted average traded price of Advanced Health shares over the 30
      business days prior to 28 January 2021, being the date on which the price was determined by
      the board of directors.

   5. Renewal of cautionary announcement
      The proposed rights offer if concluded successfully, may have a material effect on the price
      of the Company’s securities.

       Accordingly, shareholders are advised to continue to exercise caution when dealing in the
       Company’s securities until a full announcement regarding the details of the rights offer is
       made.

Johannesburg
2 February 2021

Designated Advisor
Grindrod Bank Limited

Date: 02-02-2021 03:30:00
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