Mediclinic is set to buyback 23 million shares from its empowerment partner, Mpilo 1, for R2.45 billion as restructures the financing of the deal.
Mpilo will use the proceeds of the buyback to settle existing funding and fund the exit of some shareholders from its parent, MP1 Investment Holdings Proprietary, Mediclinic says in a statement to shareholders.
The hospital group adds Mpilo will also raise additional funding from third party financiers on more favourable and sustainable terms than those of the existing funding.
In addition, the lock in period, which was set to expire next December, will be extended until the end of 2019.
Mediclinic explains Mpilo was established as a majority black-owned company to acquire and hold an equity interest in Mediclinic as part of the BEE transaction implemented by Mediclinic and Mpilo 1 in December 2005.
Mpilo currently holds 2.69% of Mediclinic.
Mediclinic says the transaction has been successful as value has been created for those who took part. It adds Mpilo is now at a stage where it can refinance under less onerous conditions.
Bridging finance of R2.9 billion will be provided by, among others, Mediclinic and FirstRand Bank.
IOL