Clarification of Resolution 3

Abano Healthcare Group Limited Clarifies The Intent Of Resolution 4
Company announcement

Abano Healthcare Group today explained the purpose of Resolution 4, as set out in its recently posted notice of meeting for its upcoming Annual General Meeting to be held at the Ellerslie Convention Centre on Thursday 27th November 2003. The resolution seeks the approval of shareholders to allow the directors to place new shares the equivalent of up to 19.9% of the shares in the company with habitual shareholders.

“The reason for the resolution is that the board wishes to retain flexibility in completing any capital raising initiatives, to facilitate acquisitions or improve the financial base of the company in the period,” said Jim Syme, the company’s chairman. “We recognise and appreciate the loyalty of existing shareholders, and are mindful that many would like to be given the opportunity to participate in future capital raising rounds. Therefore, as a matter of policy, we would like to raise new capital from existing shareholders wherever practicable”, he said.

“However, in some circumstances, where for example shares can be issued as consideration for an acquisition, or the company has timing constraints or needs certainty in respect of a capital raising, it is often more prudent and efficient to place shares rather than, for example, to make a pro rata rights issue.”

Mr Syme continued: “That said, the board has decided, that in the event that shares are placed during the next six months under Resolution 4, which are equivalent to more than 15% of the company’s shares currently on issue, that the board would provide existing shareholders with the opportunity to subscribe for further shares in the company at a price and on terms no less favourable than that offered under any such placements. This is the level of authority for placement that was granted to public company boards by the stock exchange on the 29 October 2003.”