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Mediclinic buys out UAE minorities, but denies avoiding SA

Business Report   August 28 2012

Private hospital group Mediclinic International has denied that the expansion of its investment in the United Arab Emirates (UAE) was an indication of diminished prospects in South Africa and anxiety about the introduction of National Health Insurance (NHI). Speaking at the announcement that the group would increase its effective shareholding in Dubai's Emirates Healthcare to 100 percent, Mediclinic chief executive Danie Meintjes said the investment strategy still recognised South Africa as the group's strongest market.

This year the hospital group would invest more than R600 million to expand capacity in its Limpopo, Nelspruit and Pietermaritzburg hospitals and would build a new hospital in Centurion. "NHI is not driving us to disinvest in South Africa," Meintjes said. Mediclinic said yesterday that it had reached deals to acquire Emirates Healthcare's minority stakes from the Varkey Group and General Electric for $224m (R1.85 billion). The group, which already owned 50.37 percent of Emirates Healthcare, said the transaction would have increased its normalised headline earnings a share for the year to March 2012 by 1.3 percent on an unaudited pro forma basis. Emirates Healthcare has the capacity to operate 334 beds, and serves more than 600 000 patients a year in its two hospitals and eight out-patient clinics. The transactions were subject to the fulfilment of conditions including approval by shareholders and regulators. Yesterday's announcement came less than a month after Mediclinic announced its debt refinancing plans, which it said would partly be used to pursue growth across the regions in which it operated.