Wednesday 3rd November 2004 |
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The agreement gives Abano Healthcare Group Limited the right to acquire the trust's interest in Ascot Radiology in April 2007 for a price determined by reference to an earnout formula. The earnout formula is linked to the practices profitability.
The sale price (depending on actual profitability achieved) could range from $500,000 to in excess of $1 million. Should the profitability not achieve a pre-agreed level either party has the right to terminate the option agreement. Based on Ascot Radiology's current management forecast for the year to 31 March 2007, the sale price for the Trust would be $1 million.
The current book value of this investment is $100,000.
Calan chief executive Miles Wentworth said "The entering into this option agreement could provide us with a premium price and a significant gain on sale for the Trust. In addition to these benefits, this is in line with our stated strategy of exiting non-revenue producing assets".
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