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ElderCare Sells Stake In Project Management

ElderCare Sells Stake In Project Management Business

Auckland – July 26, 2001 – Healthcare provider, ElderCare New Zealand (NZSE: ELD) today announced that it had reached agreement to sell its 50 percent holding in Pacific Projects Ltd to its joint venture partner.

Under the agreement ElderCare retains a fifty percent interest in any future profits on the convertible note entitlements above 14.3 cents per share, issued in consideration for the purchase and will retain a preferred supplier arrangement with Pacific Projects such that any future developments which it undertakes for Eldercare will be at rates beneficial to Eldercare.

Pacific Projects is a project management company, which specialises in the design and development of retirement and aged-care facilities. Its sale is consistent with Eldercare’s stated intention of exiting the property development sector of the retirement industry to concentrate on acquiring fee income generating businesses in the wider healthcare sector. These will complement its existing nursing home, assisted living, assessment and rehabilitation facilities.

The sale will result in a one-off goodwill write-down of $467,000, which has been provided for in the year ended 31 May 2001. Together with other adjustments it reflects the Company’s intent to clear the balance sheet of items that are not seen as core to its future, as foreshadowed in the Company’s half year report to shareholders.

Commenting on the sale Chairman Maurice Kidd said, “The agreement allows us to share the upside of our own share performance while retaining the advantages of beneficial pricing with Pacific Projects, as if we were still a shareholder, and reflects our confidence in the future of ElderCare as it continues to consolidate and move into the wider healthcare market.”

“This is the first of a series of announcements we anticipate making over the next few months as we realise more non-core assets and pursue an acquisition programme, concentrating on operations ownership rather than property development,” said ElderCare Chief Executive Alan Clarke.

ENDS

Company Background
ElderCare New Zealand Limited (NZSE: ELD) is a healthcare provider. The company owns a substantial portfolio of nursing homes, assisted living and assessment and rehabilitation facilities throughout New Zealand. These offer an array of specialised services to cater for the healthcare needs of a broad range of New Zealanders. The company has embarked on a programme that will see it expand its operations into other fee income generating businesses in the wider healthcare sector.

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