South Africa. South Africa is one of the most promising healthcare markets in the entire MEA region. Population of approximately 50 million

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1 Projects

2 South Africa South Africa is one of the most promising healthcare markets in the entire MEA region Population of approximately 50 million According to the Business Monitor International (BMI), Healthcare spending projected to grow by a CAGR of 8.9% in local currency and 9.4% in US dollar terms by 2017, to ZAR billion (US$53.02 billion) Has a low risk profile with a strong longer- term commercial potential because of its sizeable population and economic development High growth is driven by strong demographics, increased healthcare needs; these needs include the rising burden of non- communicable diseases such as diabetes, asthma and cardio- vascular complications 34th in the World Bank/IFC ease of doing business ranking Page 2

3 Project I: RPH Gauteng Province Gauteng Province has a population of approximately 12 million and contributes more than 33% to the national economy and 10% to the GDP of the entire African continent. Johannesburg is the capital of Gauteng province whilst Pretoria (also in Gauteng), is the capital of South Africa. The province has the highest per capita income in the country. Key highlights; Proposed 100 bed private facility to be built and managed in Gauteng Land is secured, zoned and other bulk services are in place License approval has been secured There are currently no third party agreements in place Projected to cost ZAR200 million Consortium is open to either debt or equity funding Consortium is open to investor(s) putting in place a management team to run the hospital Time lines involved; looking to commence at the earliest opportunity Project sponsors need assistance with business plan, feasibility study Page 3

4 Project II: EMC Mpumalanga Province Mpumalanga Province has a population of approximately 4 million. It is bordered by Mozambique and Swaziland to the east and the Gauteng to the west. It is home to the world renowned Kruger National Park. Key highlights; Proposed 100 bed private facility to be built in the Nkomazi area of Mpumalanga Nkomazi is strategically placed between the north of Swaziland and the east of Mozambique; the proposed private hospital will also receive/serve patients from these neighbouring countries There is currently no private facility in the area; the nearest of which is 120km away Management intends to register the EMC as a National Health Insurance accredited medical centre Feasibility study revealed that 28% of population sought private healthcare whenever they fell sick Land is secured, zoned and other bulk services are in place License has been secured Projected to cost ZAR220 million Consortium is open to either debt or equity funding Page 4

5 Namibia A country of about 4.5 million people, a dark horse often overlooked in favour of its far richer neighbour, South Africa Projected to grow faster than any other country in the sub- region this year, with a growth in healthcare expenditure up 9.4% in local currency from N$ 5.71 billion ($591 million) in 2013 to N$6.24 billion ($606 million) in 2014 Business Monitor International This high growth is driven by strong demographics, increased healthcare needs as well as significant expected economic growth (up to 5% forecast this year). These combined factors will likely yield increased private spending due to the increase in per capita wealth, as well as increased public spending since the government plans to increase the proportion of fiscal expenditure devoted to healthcare One of the least corrupt countries in Africa (4th in Africa and 57th in the world Transparency International), hence helping to ensuring a lasting perception of political continuity and stability Country s stable democracy and market friendly policies encourage improved business climate. Page 5

6 Project I: LPPH - Windhoek A brand new 126 bed secondary and tertiary private hospital to be located in the southern part of Windhoek, Namibia s capital early stage greenfield project Scheduled to be fully operational in 2015; construction underway by one of Africa s most established health management firms. Hospital to offer a comprehensive array of medical and surgical disciplines including trauma, neuro, ophthalmic, plastic, and orthopaedic surgery as well as ENT and oncology services. Also to offer other ancillary services such as retail pharmacy and a diagnostic laboratory Estimated cost is estimated at N$420 million ($41 million). Of this amount, N$145 million ($14.3 million) is in equity, and N$267 million ($24.8 million) is scheduled to be issued as debt. All the equity has already been taken up, but the sponsors of the project are willing to consider up to another 10% of debt ($2.5 million) as further equity if needed. Hence, a maximum of $25 million or a minimum of $22.5 million is available to be issued as debt Page 6

7 Project II: LPSH Brand new four 60- bed secondary private satellite hospitals to be built in various townships across Namibia by the same management company These hospitals to be named and operate under the LH brand, carrying on as a second phase brownfield from Project I Estimated to cost in the region of N$120 million each ($12 million) each Currently in the feasibility stage ; feasibility expected to be completed in April / May 2014 Debt structure is to be split into a debt to equity ratio of 60:40, both of which are available.. Page 7

8 Kenya The largest and most economically developed country in the Eastern African Community (EAC) Has the largest population in the EAC region of approximately 44 million (Dec 2013 est.) The EAC is the most regionally integrated economic community in Africa; healthcare regulation harmonisation is the most advanced on the continent. Healthcare deals in Kenya, are therefore potentially more easily scalable across the EAC than in any other sub continental economic grouping in Sub Saharan Africa The Healthcare market is worth $1.83 billion, and growth is expected to top 16% in 2014, driven by robust expected GDP growth of up to 6.2% this year According to the BMI, the healthcare market in Kenya offers better commercial promise, opportunities and a more stable business environment than many other comparable African economies Has the largest pharmaceutical manufacturing industry in East Africa, a free pharmaceutical pricing environment, and a well developed health tourism sector Page 8

9 Project I: HDE A large successful conglomerate with a 30,000 active co- operative members in Kenya plans expand its reach in Kenya s healthcare market by partnering with one of the countries most successful and established private healthcare providers a brownfield early stage project. Highly scalable health ecosystem currently being rolled out across Kenya; consisting of out patient clinics, bed capacity cottage hospitals, high end diagnostic centres, and medical training schools. Phase 1: Currently underway at a cost of $30 million. Includes 40 clinics ($6 million), 5 cottage hospitals ($10 million), 1 diagnostic centre ($10 million) and 1 medical school ($4 million). These facilities will all be operated in leased buildings, hence considerably reducing sunk costs Phase 2: Expected to begin in 2-5 years, will cost $54 million. Involves establishing 60 further clinics, 8 hospitals ($40 million), and additional equipment for the diagnostic centre ($5 million). This phase will involve construction of new buildings, hence the higher unit costs Funding is being sought for each of these phases, and debt, equity or a mixture of both are welcome. Page 9

10 Ghana Ghana has one of the most promising healthcare markets in the West African sub- region Has a sizeable popula:on of 25 million,a well- developed Na:onal Health Insurance Service and one of the most advanced healthcare systems in West Africa. Is a member of the Economic Community of West African States (ECOWAS) which has a market of some 250m people. Healthcare market is up 13.6% in local currency terms to $1.84bn in The BMI praises Ghana s strong local pharmaceu:cal manufacturing market, its expected robust healthcare market growth prospects, and its real GDP forecast of 7.2% in Though corrup:on remains a concern, Ghana is s:ll recognized as a rela:vely good place to do business, scoring a respectable 64 th on the ease of doing business rank (6 th in Africa) and 63 rd in the Transparency Interna:onal ranking (6 th in Africa) A growing burden of Non Communicable Diseases and a rapidly expanding middle class offers significant opportuni:es for healthcare investment. 10

11 Project I: Pharmacy retail outlet expansion A small retail pharmacy chain, located in Accra, Ghana seeks to expand its number of stores. Pharmacy now has three retail outlets, is wholly Ghanaian owned and has been trading for ten years. In 2013, total sales reached GHC 1.5 million($500,000) and is forecast to top GHC 4.5 million($1.5m) by the end of Pharmacy chain seeks to expand to 20 retail outlets and 2 wholesale outlets in 2 phases. Phase 1 involves establishing 10 outlets in main shopping centres in Ghana s main ci:es. Phase 2 involves establishing 10 outlets in densely populated major ci:es and towns in Ghana as well as 2 wholesale outlets. Ini:al funding sought for this brownfiield project is $4 million, preferably in debt, but other op:ons possible. 11

12 Other Information Key project financials, business plans, bios of the management, and further details of the project(s) are available on request, and please do not hesitate to get in touch if you require any other information Page 10

13 Contact Information United Kingdom Steven N. Adjei BPharm (Hons) MRPharmS MBA Founding Partner: BlueCloud Healthcare North Quay House Sutton Harbour Plymouth, PL4 0RJ United Kingdom T: +44 (0) M: +44 (0) E: Southern Africa Kwaku Obeng- Appiah BSc (Hons) MBA Founding Partner: BlueCloud Healthcare 43 Birchwood Court Montrose Street, Vorna Valley Midrand, 1686 South Africa T: +27 (0) F: +27 (0) M: +27 (0) SD: E: k.obeng- W: E: UK registration number: Page 11

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