NOTES TO THE FINANCIAL STATEMENTS
CAPITAL – FINANCING
RAMSAY HEALTH CARE LIMITED
7 Equity (Continued)
7.c Convertible Adjustable Rate Equity Securities (CARES)
Convertible Adjustable Rate Equity Securities (CARES) are non-cumulative, redeemable and convertible preference shares in
Ramsay Health Care Limited.
Issued and paid up capital
2.6 million CARES shares fully paid (30 June 2020: 2.6 million CARES shares fully paid) 252.2 252.2
Terms and conditions of CARES
Issuer Ramsay Health Care Limited
Security Convertible Adjustable Rate Equity Securities (CARES) which are a non-cumulative, redeemable and convertible preference
share in Ramsay.
$100 Per CARES.
Dividends The holder of each CARES is entitled to a preferred, non-cumulative, floating rate dividend equal to:
Dividend Entitlement = (Dividend Rate x Face Value x N) / 365
N is the number of days in the Dividend Period
The payment of Dividends is at the Directors’ discretion and is subject to there being funds legally available for the payment
of Dividends and the restrictions which apply in certain circumstances under the financing arrangements.
If declared, the first Dividend will be payable on each CARES in arrears on 20 October 2005 and thereafter on each 20 April
and 20 October until CARES are converted or exchanged.
The Dividend Rate for each Dividend Period is calculated as:
Dividend Rate = (Market Rate + Margin) x (1-T)
The Market Rate is the 180 day Bank Bill Swap Rate applying on the first day of the Dividend Period expressed as a
percentage per annum.
The Margin for the period to 20 October 2010 was 2.85% per annum. It was determined by the Bookbuild held on
26 April 2005.
T is the prevailing Australian corporate tax rate applicable on the Allotment Date.
As Ramsay did not convert or exchange by 20 October 2010 the Margin was increased by a one-time step up of 2.00% (200
basis points) per annum.
Step-up One-time 2.00% (200 basis points) step-up in the Margin at 20 October 2010
Franking Ramsay expects the Dividends paid on CARES to be fully franked. If a Dividend is not fully franked, the Dividend will be
grossed up to compensate for the unfranked component.
If, on a Dividend Payment Date, the Australian corporate tax rate differs from the Australian corporate tax rate on the
Allotment Date, the Dividend will be adjusted downwards or upwards accordingly.
CARES have no maturity. Ramsay may convert or exchange some or all CARES at its election for shares or $100 in cash for
each CARES on 20 October 2010 and each Dividend Payment Date thereafter.
Ramsay also has the right to:
• convert or exchange CARES after the occurrence of a Regulatory Event; and
• convert CARES on the occurrence of a Change in Control Event.
Ramsay cannot elect to convert or exchange only some CARES if such conversion or exchange would result in there being
less than $50 million in aggregate Face Value of CARES on issue.
The rate at which CARES will convert into Shares will be calculated by reference to the market price of Shares during
20 business days immediately preceding, but not including, the conversion date, less a conversion discount of 2.5%. An
adjustment is made to the market price calculation in the case of a Change in Control Event. The Conversion Ratio for each
CARES will not be greater than 400 shares.
Ranking CARES rank equally amongst themselves in all respects and are subordinated to all creditors but rank in priority to Shares.
Participation Unless CARES are converted into Shares, CARES confer no rights to subscribe for new shares in any fundraising by Ramsay
or to participate in any bonus or rights issues by Ramsay.
CARES do not carry a right to vote at general meeting of Ramsay except in limited circumstances.
Annual Report 2021 81