Life Healthcare to fund Alliance deal with $756 million offer
SA’s Life Healthcare Group Holdings Ltd., which agreed in November to buy Alliance Medical Group Ltd. for $990 million, has said it intends to raise $756 million through a rights issue. This is in a bid to reduce debt following its UK expansion.
According to Bloomberg, the rights offer will refinance a portion of the bridge facility extended by Life Healthcare to secure the deal, as well as deal with financing costs linked to the Alliance acquisition. The funds will furthermore allow the company to pay dividends and pursue a capital investment programme.
According to a statement, the fully underwritten offer will cut Life Healthcare's debt to "the appropriate level of gearing for the company to restore its investment grade credit rating".
The offer is subject to shareholder approval at the company's AGM, which will be held on 25 January 2017.
Pictured: Pieter van der Westhuizen, Life Healthcare CFO