Advanced Health plans to delist from the JSE after majority owners led by chair Alfred Grillenberger offered to buy out minority investors at 80c per share.
The company went public nearly a decade ago with a vision of rolling out affordable and quality day hospitals in SA.
Day hospitals are healthcare facilities providing short-procedure surgical services and diagnostic procedures to be performed on a same-day basis.
But its plan to be an alternative to pricier, well-established players proved difficult to realise. The company was running into losses in its SA market, leading to a cash crunch and rights issue. It has been focusing on growing patient numbers.
In a veiled attack on the JSE, Advanced Health said in a statement on Wednesday that since its listing, it could not attract significant institutional interest to justify the limitations imposed by the regulatory processes and the compliance costs that go with being a listed entity.
“Advanced Health’s ability to raise capital is hampered by the lack of investment interest in small, illiquid counters, as well as ... shares trading at a discount to their underlying net asset value, which results in any capital raise at market value being highly dilutive to Advanced Health shareholders,” it said.
In the medium to long term, it said capital raising needs will be served better in the unlisted environment.
The JSE has often been criticised for its supposedly onerous listing requirements. But it has been making reforms in an attempt to attract listings, from small businesses in particular.
“Following the disposal of Presmed Australia, the directors are focusing on turning its SA operations into a profitable business through implementing a number of strategies,” said the Advanced Health.
“As part of this focus, the Advanced Health board has reconsidered whether its smaller asset base warrants continued listing on the JSE. Given the current lack of investment interest in small, illiquid counters, the Advanced Health board is of the view that the costs associated with a JSE listing outweigh the benefits of a JSE listing.”
Advanced Health sold its Presmed Australia business, its star performer, for A$45.2m.
Founded in 1997, Advanced Health has been the majority shareholder of Presmed, which owns 10 facilities, including day hospitals and consultation clinics, since 2014.
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