Mediclinic bookbuilding raises R3.2bn

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BR Mediclinic 288[1] Independent Newspapers The Vergelegen MediClinic in Somerset West. Southern African operations are still the largest share of Mediclinic's capital commitments. Photo: David Ritchie

Johannesburg - Mediclinic International has raised R3.2 billion in a bookbuilding exercise, after placing 41 million of its new ordinary shares with institutional investors.

Priced at R77.50 per bookbuild share, the shares are discounted by 1.7 percent to their volume-weighted average price for the past 30 days of R78.86, or a R5.17 discount against Wednesday’s closing price of R82.67. They represented about 5 percent of the group’s issued ordinary shares.

Mediclinic launched the bookbuild after the JSE closed on Wednesday. By 9.01am on Thursday Mediclinic had closed and priced the bookbuild as the shares were oversubscribed.

The bookbuild was open only to institutional investors and not to the public.

Although Mediclinic’s stock dipped as much as 4.7 percent to R78.75 after the announcement – the biggest intraday decline in six months – it ended at R81 on Friday, just 0.09 percent lower than Thursday’s closing price.

Mediclinic launched the bookbuilding exercise to raise capital that would fund its recently concluded acquisition of an acute care multidisciplinary hospital in Switzerland. The company aims to close this transaction on June 25.

Although Mediclinic did not disclose the value of this transaction, it said the proceeds from the bookbuild would fund not only this acquisition but potential future transactions in Switzerland, United Arab Emirates (UAE) and Africa as well.

Mediclinic is engaged in advanced negotiations to acquire a number of other outpatient based health-care facilities in Switzerland.

While southern African operations still take up the largest share of Mediclinic’s capital commitments, Switzerland is fast catching up. In the year to March it accounted for R833 million of the group’s total R3.23bn capital commitments, while southern Africa claimed R1.7bn.

Switzerland’s share rose from R689m last year, while southern Africa decreased from R2.01bn.

But Mediclinic’s chief executive, Danie Meintjes, has consistently communicated that the home market remained the most important and that the group would continue to look for investment opportunities.

Hirslanden, Mediclinic’s operation in Switzerland, operates 14 private acute care facilities with more than 1 400 beds. It is the leading private health-care provider in Switzerland by number of hospitals.

Last year, it added a new wing, upgraded its clinics and completed the expansion of a number of its units and still has a number of major ongoing expansion projects.

In the year to March, for the first time Mediclinic generated more than 60 percent of its revenue and earnings from Switzerland and the UAE.

Switzerland generated more than half of the group’s R30.5bn revenue, the biggest share of all regions at R15.87bn.

It also generated the most operating profit and earnings before interest, taxes, depreciation and amortisation.

The restructuring of the group’s Swiss debt last year turned over a new leaf for the group’s operations as it cut its repayment costs. - Business Report


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