Africa – AMI’s Action Against the Pusan Trust

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AMI (African Medical Investments plc) the AIM listed company operating in the African healthcare sector, has announced the Company is actively taking steps to cancel the 24 million shares in the Company which are owned in trust for Dr. Solanki, the former CEO of the Company, his wife and daughter.

The move is due to the criminal proceedings being pursued against Dr. Solanki by the South African Police Service.

Link to the briefing:
http://www.iii.co.uk/investment/detail?code=cotn:AMEI.L&it=le

 

Preventable?  Some we’ve talked to think yes.

Routine?  No.

African Medical Investments (AMI) is gaining a lot of attention since we wrote about them late last year.  (November, 2009)

But when one takes even a cursory look, questions are raised.

There is a real push-pull going on between the experience and expertise of this company’s leadership. As written prior, we’re not at all excited about their long term prospects targeting the trauma segment.

And yet AMI recently announced a new venture: Aero-Medical, an air ambulance service.

The reason for launching an air ambulance service is clear.  AMI’s chairman, Mr. Phil Edmonds, is a mining/oil executive.  Extraction industries love air ambulances, and so they should.  We have written positively about emergency services such as Falck, and believe there is great potential for these types of businesses in frontier countries.

But we have been equally critical about hospitals starting up their own ambulance services in order to fill their empty beds. 

Unfortunately, it appears Mr. Edmonds, short on market analysis, was recently quoted as stating about the ambulance service “…our Aero-Medical service, which we believe is desperately needed in Africa.” 

I am sure one more air ambulance service IS needed in Africa.  Just not one owned by a hospital company.  In the air, or on the ground, an ambulance bringing patients to hospitals is a risky patient supply source for any hospital. 

And to bring this air ambulance service to fruition, AMI has maxed it equity line with Harbinger Capital.   Ok, they are finishing another hospital, but…..

Overall, we do think AMI has a strong future.  But as we stated last November, we are looking for a more diverse and sector experienced board.  It is still too heavily slated towards extraction………..HK

 

Note: The Aero-Medical service being launched will start with a Falcon 20 jet. The carrying cost, let alone acquisition, (leased or not) will prove to be a significant drain on AMI.  Because these patients will most likely come from AMI affiliated extraction companies, we see AMI’s receivables facing a potential challenge.

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On November 26, 2010
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