At RH Bophelo Limited (RH Bophelo or RHB), we are guided by the understanding that an investment in healthcare is an investment in South Africa’s socio-economic development. We believe that there is a correlation between the well-being of the population and the economy. The healthier people are, the better able they are to participate in the country’s economy and contribute to its growth.
Today, many South Africans have been excluded from the mainstream of the economy due to poor health; the potential and dreams of young Africans have been hijacked by the lack of good infrastructure and easy access to quality healthcare. It is for this reason that we are even more committed to contributing to the development of South Africa’s healthcare sector. To ensure that this happens, we have embarked on a journey to grow our investments in the healthcare sector, the #RHB1Point5 mission has begun and we invite you to be a part of it.
Our journey in the past two years
From the very beginning, RHB’s vision has been to increase access to affordable healthcare for all South Africans. The commitment to the vision was demonstrated through the milestone of listing RH Bophelo on the JSE; it was at that moment that we became the first black-owned and managed company to be listed.
After we listed, we acquired hospitals and access products. The access products have allowed us to roll-out access to hospitals to communities and employer groups that were not able to afford private healthcare.
We are excited about the developments and the role RH Bophelo has played in the sector for the past two years, but we are aware that there is still so much that we need to achieve. We have identified more areas that still lack adequate investments in healthcare, which are mainly townships and peri-urban areas that can still benefit from our expansion.
This rapid roll-out has seen RHB acquire the following hospitals and complementary businesses:
- Eight hospitals (three specialised and five entry hospitals)
- One nursing college (training and development)
- Wesmart: a health insurance company UMA
- Genric: a short-term underwriter
- Africa Health Care: a hospital logistics and hospital management company (managing three additional hospitals)
- Africa Assist: a cost containment and distribution company
Our access products allow us to migrate a sizeable part of the population into the private healthcare environment, thereby reducing the government’s responsibility to manage the ever-increasing healthcare bill that covers over 80% of the population.
The expansion
RH Bophelo plans to expand its footprint to all the regions of South Africa. This ambition will require the company to raise additional capital in order to realise its plans and strategy. The original capitalisation of RHB was only R500 million, 90% of which has been used to acquire viable investments within the healthcare value chain.
In order for us to continue growing and serving the healthcare sector, we need to raise additional capital. To this end, we have decided to offer our shareholders the opportunity to subscribe to further shares. We are working towards raising R1.5 billion to grow our investment portfolio from R600 million to R2.1 billion.
Due to our current size, in comparison to market size (healthcare accounts for 9% of GDP), it was prudent for the business to raise additional capital through the issue of additional shares to existing and new shareholders. We believe the funds raised will give RHB the biggest infrastructure footprint in the country and a more aggressive national roll-out of access products. This is in line with the strategy of putting a hospital in each township in South Africa. Our goal is to become the most efficient operator with over 80 hospitals.
We have issued new shares for the following reasons:
- To expand our footprint in every province and township of South Africa.
- We want to be at the forefront of healthcare solutions.
- We see it as an opportunity for growth, as all other businesses have stagnated or are not able to expand due to competition rules;
- To develop a strong pipeline of projects that are at an advanced stage, across the country.
- To improve the liquidity of the shares for the company; only an increased market cap can improve liquidity.
- To migrate the employed and uninsured through our affordable access products.
- To be the largest healthcare investment company in South Africa.
- To bring efficiency to the healthcare sector.
- To create an opportunity for all South Africans to become active shareholders.
As a shareholder, you can expect the following benefits:
- The rights issue is done at a 5% discount off the market price.
- A target ROE of 20%.
- A dividends policy that warrants distribution of dividends within 2 years.
- Stock currently trading at a premium to its net asset value (NAV).
A note to new shareholders
RH Bophelo has partnered with Afrifocus Securities as its retail equity broker for the distribution of only 5% of the offered RH Bophelo shares. Any interests below R5 million in the rights offer are urged to sign up on the RH Bophelo website or email us directly.
As soon as you sign up, a broker from Afrifocus Securities will contact you to facilitate an opening of a JSE trading account. Once you have deposited the funds, RH Bophelo shares will be allocated to your profile. The shares available are limited and you will need to register your interest sooner.
Other institutions: Please email us on invest@rhbophelo.co.za or call us on 010 007 2171 to request a meeting.
Join the RH Bophelo journey by subscribing to the rights offer. Together we can achieve more.
