The recent drop in Netcare’s share price following the release of weak interim results has forced CEO Richard Friedland to sell R200 million worth of his shares to cover finance and other costs relating to share purchases over several years, according to a report in Business Day.
“As a result of the recent decline in Netcare’s share price, Dr Richard Friedland was obliged to effect the trades to balance the cost of acquisition and related finance charges arising from the purchase of his shares and the exercising of share options over several years, against the current value of the share,” the private hospital group says in a statement released to the market yesterday.
According to Business Day, the sale of 10.4 million shares at just under R19 each, appears to represent almost all the Netcare shares held by Friedland. The group’s September 2018 annual report reveals that in addition to the 10.4-million shares, Friedland held 1.4-million forfeitable shares.
In its statement, Netcare says Friedland remains “absolutely committed” to Netcare and that he has confirmed his intention to remain in office as CEO to oversee the implementation of the company’s revised strategy, a key component of which is digitisation until at least the end of 2022.
Releasing Netcare’s results for the six months ended 31 March earlier this month, Friedland warned that operating conditions in the private healthcare sector are becoming more challenging in the light of an increasing number of medical schemes introducing hospital networks and a stagnation in the number of medical scheme members.