Life Healthcare will reduce its debt after it said yesterday it had sold 100 percent of its shares in Scanmed in Poland to Abris Capital Partners for R806 million. Photo: Supplied
Life Healthcare will reduce its debt after it said yesterday it had sold 100 percent of its shares in Scanmed in Poland to Abris Capital Partners for R806 million. Photo: Supplied

Life Healthcare to reduce its debt after Scanmed sale in Poland

By Sandile Mchunu Time of article published Nov 27, 2020

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DURBAN - LIFE Healthcare will reduce its debt after it said yesterday it had sold 100 percent of its shares in Scanmed in Poland to Abris Capital Partners, a central European private equity fund manager, for R806 million.

The group said that the disposal represented a further step towards its strategic objective of growing its share of revenue and earnings from nonacute sources.

Scanmed operates in 42 locations across Poland and offers comprehensive medical services in acute facilities, cardiac centres, mono clinics and outpatient facilities.

“Scanmed’s total enterprise value, representing the disposal consideration, is PLN340m (R1.38 billion). The disposal consideration will be settled in cash and Life Healthcare will receive approximately PLN199m after the settling of debt in Poland. The full transaction proceeds will be used to reduce the group’s debt levels,” the group said.

Life Healthcare said the disposal constituted a category 2 transaction in terms of the JSE listings requirements and did not require a shareholder approval.

Life Healthcare said the transaction remained subject to South African Reserve Bank approval and to the approval of European competition authorities. However, it expected the transaction to close by the middle of next year. Scanmed, in its results released last week for the year to end September, reported an operating profit of R59m and its reported net asset value amounted to PLN186m.

The group said the exchange rate used in the announcement was the closing rate on November 24, which was PLN1 equal to R4.05.

The disposal of Scanmed was put on hold in May during its interim results presentation after Life Healthcare decided to suspend the process of disposing the asset due to the uncertainty and market volatility brought on by the Covid-19 pandemic. It announced that it was expecting to restart the process towards the latter part of the year, depending on market conditions.

Scanmed was responsible for the group reporting a 54.5 cents a share decline in earnings per share after it suffered an impairment of R793m during the year to end September. This resulted in the group reporting a loss of 6.4c during the period.

Its overall results showed a 45.1 percent decline in headline earnings per share, while revenue was marginally down by 1.1 percent, hurt by an impairment charge in Scanmed, Covid-19 outbreak and a provision for additional expected credit losses.

Life Healthcare shares closed 0.50 percent lower at R15.96 on the JSE yesterday.

BUSINESS REPORT

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