Notice of Special Meeting

14521281_1

15 March 2022





Dear Shareholder

Please find enclosed notice of Promisia Healthcare Limited’s (PHL) special meeting of shareholders
which will be held virtually via Link Market Services’ virtual meeting platform at
www.virtualmeeting.co.nz/phlsm22 on Wednesday, 30 March 2022 starting at 11am.

Capitalised terms used in this letter will, unless otherwise defined, have the meaning given to them in
the Glossary, contained in the enclosed Notice of Meeting.

Background

On 23 December 2021, PHL’s wholly owned subsidiary Aldwins House Limited entered into a conditional
Agreement for Sale and Purchase of Real Estate with the Vendor to acquire the freehold title to the
Aldwins Facility. AHL currently leases the Aldwins Facility from the Vendor and provides rest home,
respite, hospital level and palliative care to the elderly with the capacity to care for up to 145 residents.

AHL currently operates the Aldwins Facility at a financial loss. PHL has been funding these losses from
the profits it generates at its other three facilities. The key driver of revenue at the Aldwins Facility is its
occupancy level, which has built gradually to approximately 50 residents since opening.

As was recently announced to the market, an opportunity to have up to 40 new residents transferred to
the Aldwins Facility from another Christchurch facility has arisen. AHL is in the process of speaking with
those potential residents and seeking their agreement to transfer to the Aldwins Facility. If a large
proportion do agree to transfer to the Aldwins Facility, the Aldwins Facility could become profitable for
the 2023 financial year. PHL will update the market on the outcome of these discussions in around one
week’s time.

A significant expense for the Aldwins Facility is rent. Rent exceeds the interest cost that AHL would incur
through acquiring the Aldwins Facility using debt funding under this transaction, improving its
profitability. In addition, the Board considers that there is a good prospect of the Aldwins Facility
appreciating in capital value over time. For these reasons the Board has decided to proceed with the
Acquisition subject to shareholder approval.

Aldwins Facility Acquisition

The Purchase Price of the Aldwins Facility is $13,000,000 plus GST (if any). The Aldwins Facility is
situated on a freehold title of approximately 8,244m
2
in central Christchurch.

The Board proposes to finance the Acquisition from the following sources:

• AHL drawing a term loan from the Vendor of $4 million at Completion;

• AHL drawing a new $7.5 million debt facility from Bank of New Zealand; and

• PHL drawing on a $1.5 million extension of its current debt facility with Senior Trust Retirement
Village Income Generator Limited.

The Acquisition is conditional on PHL shareholder approval under Listing Rule 5.1.1(b). Subject to this
condition being satisfied or waived, the Acquisition will settle on 31 March 2022 or five working days
from the date all conditions are waived or satisfied (whichever date is earlier).

14521281_1 2
Benefits of the Acquisition

The Board considers the Acquisition to be in the best interests of PHL, as it will:

• enlarge PHL’s property portfolio and bring the Aldwins Facility in line with PHL’s strategy of
owning rather than leasing its aged care facilities;

• reduce PHL’s short term cash burn associated with the Aldwins Facility (by bringing the Lease
to an end) and improve the profitability of the Aldwins Facility; and

• support PHL making further investment in the Aldwins Facility, particularly in sales and
marketing initiatives to increase occupancy.

If the Acquisition does not proceed, PHL may incur losses in AHL for a longer period. The Board will
need to consider whether PHL allocating capital to fund those losses is the best use of that capital or
whether AHL’s current operations at the Aldwins Facility should be sold or wound down.

Approvals Sought

Under the Listing Rules, approval of PHL’s shareholders is required to proceed with the Acquisition. A
description of the Acquisition and the requirement for the Resolution to be considered at the Meeting
are set out in the enclosed Notice of Meeting.

The Resolution being put forward at the Meeting will, if passed, authorise the Board to proceed under
the Listing Rules with the Acquisition.

Board Recommendation

The Board considers that the Acquisition is in the best interests of PHL and its shareholders and
recommends that shareholders vote in favour of the Resolution outlined in the enclosed Notice of
Meeting. The Board encourages you to read the Notice of Meeting and to exercise your right to vote.

The enclosed Proxy Form has detailed instructions on how shareholders may lodge their vote or appoint
a proxy to vote on their behalf if they are unable to attend the meeting online. Shareholders may submit
specific questions to the Board at any time in advance of the meeting by emailing me at
stephen@renouf.co.nz.

I look forward to seeing you at the meeting.




Stephen Underwood
Chairman

14521281_1 3
NOTICE OF SPECIAL MEETING

If you have sold or otherwise transferred all of your shares in PHL, please pass this Notice of
Meeting, together with all accompanying documents, as soon as possible to the purchaser or
transferee or to the broker or other person who arranged the sale or transfer of your shares.

Notice is hereby given that a special meeting (Meeting) of shareholders of Promisia Healthcare Limited
(PHL) will be held virtually via Link Market Services’ virtual meeting platform at
www.virtualmeeting.co.nz/phlsm22 on Wednesday, 30 March 2022 starting at 11am.

Capitalised terms used in this Notice of Meeting have the meaning given to them in the Glossary to this
Notice of Meeting.
AGENDA
A. Chair’s introduction.
B. Presentation to shareholders.
C. Shareholder discussion.
D. Resolution.
RESOLUTION

To consider and, if thought fit, to pass the following ordinary resolution:

Approval of Acquisition: That, under Listing Rule 5.1.1(b), PHL undertaking the Acquisition
and entering all associated financing for the Acquisition on the basis described in this Notice of
Meeting is approved.

PROCEDURAL NOTES
Proxies
Any shareholder of PHL who is entitled to attend and vote at the Meeting may appoint a proxy to attend
and vote on their behalf. A corporation which is a shareholder may appoint a representative to attend
the Meeting on its behalf in the same manner as it could appoint a proxy. A proxy does not need to be
a shareholder of PHL. A Proxy Form can be returned by delivery, mail, email or online (as set out
below).
The Chair of the Meeting (Mr. Stephen Underwood) and any of the Directors are prepared to act as
proxy. Where any Director is appointed as a discretionary proxy, each of the Directors intends to vote
in favour of the Resolution.
To appoint a proxy you should complete and sign the enclosed Proxy Form and either return it by
delivery, mail or email to the share registrar of PHL:
By delivery:
Promisia Healthcare Limited
C/- Link Market Services Limited
Level 30, PwC Tower
15 Customs Street West
Auckland 1010
By mail:
Promisia Healthcare Limited
C/- Link Market Services Limited
PO Box 91976
Auckland 1142
By email: meetings@linkmarketservices.co.nz (please put the words “Promisia Healthcare
Limited Proxy Form” in the subject line for easy identification)

You may also lodge your proxy online at https://investorcentre.linkmarketservices.co.nz/voting/PHL.
You will require your CSN/Holder Number and FIN to complete your proxy appointment. A shareholder
will be taken to have signed the Proxy Form by lodging it in accordance with the instructions on the
website.

14521281_1 4
The completed Proxy Form must be received by Link Market Services no later than 48 hours before the
Meeting, being 11am on Monday, 28 March 2022. Online proxy appointments must also be completed
by this time. Registered shareholders at that time will be the only persons entitled to vote at the Meeting
and only the shares registered in those shareholders’ names at that time may be voted at the Meeting.
Ordinary Resolution
The Resolution is an ordinary resolution. An ordinary resolution is a resolution passed by a simple
majority of votes of those shareholders entitled to vote and voting on the resolution in person or by
proxy.
Voting Restrictions

There are no voting restrictions applicable to the Resolution.

NZX No Objection

This Notice of Meeting has been reviewed by NZ RegCo. NZ RegCo has confirmed that it has no
objection to this Notice of Meeting.

14521281_1 5
EXPLANATORY NOTES

ABOUT THE ALDWINS FACILITY

The Aldwins Facility opened to residents in December 2020 after undergoing earthquake strengthening
work and completing a thorough refurbishment. The Aldwins Facility is located in central Christchurch
and comprises of approximately 4,288 m2 of buildings on 8,241 m2 of land. The complex consists of
145 bedrooms, most with ensuite bathrooms. AHL currently employs 40 staff at the Aldwins Facility.

The amenities at the Aldwins Facility include a reception foyer, open plan entertainment hall with
adjoining kitchenette and hair salon/beauty room, dining room serviced by a large commercial grade
kitchen, nurses’ stations, sitting rooms, staffroom, administration offices, sheltered communal outdoor
areas situated within two internal courtyards, 75 car parking spaces and two double-width bed sized
elevators.

The Aldwins Facility has Ministry of Health certification for providing rest home, respite, hospital level
and palliative care to the elderly. This certification enables the Aldwins Facility to receive Government
funded residents and patient referrals from the Canterbury District Health Board. The Aldwins Facility is
currently certified to 27 November 2024 and is subject to regular audits to assess the services provided
to residents and the physical environment of the Aldwins Facility. In its October 2021 audit, the Aldwins
Facility achieved full attainment of all standards it was audited against
1
.

In addition to those referrals, the Aldwins Facility also obtains residents through families looking for care
for their elderly relatives. Revenue is derived from the Canterbury District Health Board (on a per person
per night basis) and from residents for additional services that they or their families fund directly.

The Aldwins Facility is owned by the Vendor with AHL as the tenant under the Lease. AHL commenced
renting the Aldwins Facility on 1 March 2020. Annual rent for the Aldwins Facility is $1,060,000 plus
GST.

DECISION TO ACQUIRE THE ALDWINS FACILITY

PHL acquired AHL in October 2020 as part of a wider transaction where it acquired three aged care
facilities in the North Island. As part of the acquisition PHL also acquired an option to purchase the
Aldwins Facility for $11,000,000. The Board decided to not exercise the option and it lapsed on 9 August
2021. At the time the option lapsed the Board was aware that further works and investment on the
Aldwins Facility were needed and occupancy growth at the Aldwins Facility was slower than anticipated.
For these reasons AHL was not positioned to seek debt finance and fund the exercise of the option at
that time.

Over subsequent months occupancy rates improved and showed a more consistent trend at the Aldwins
Facility. AHL has also developed a clearer understanding of the repairs and maintenance work needed
in the Aldwins Facility. Under AHL’s ownership some roof repairs to the Aldwins Facility will be needed
together with various other minor works. The Board estimates that expenditure of $300,000 will be
required in the next 12 months to remedy all outstanding repair and maintenance issues and these
expenses can be funded out of Group cashflows as they arise, without further debt or a capital raising
by PHL being required.

In addition to these investigations and as a more consistent occupancy improvement rate at AHL
developed (see graph below), AHL commissioned a valuation report on the Aldwins Facility from CBRE
Limited to assist its decision making in whether to acquire the Aldwins Facility. The valuation was
prepared as at 9 September 2021 and valued the Aldwins Facility at $14,150,000. The valuation was
prepared as a market valuation on a freehold going concern basis inclusive of land, buildings, chattels
and business disregarding the Lease. The Board does not consider that the value of the Aldwins Facility
will have changed materially since the date of this valuation. A new valuation has not been
commissioned and made available to shareholders. The Board considers that the cash costs and time
costs incurred in arranging such a valuation report outweigh the benefits that any such valuation report

1
A copy of the audit report can be viewed at
https://www.health.govt.nz/sites/default/files/prms/audit_summaries/AuditSummary_PRMS_CommunicatePublish_0000196440
01.docx

14521281_1 6
would provide to shareholders given that acquiring aged care and retirement village assets is part of the
Group’s core business.

With this additional information the Board decided to negotiate with the Vendor with a view to acquiring
the Aldwins Facility and, to part fund the transaction, negotiated the Vendor Finance aspect of the
transaction. The outcome of these negotiations was a purchase price of $13 million and the Vendor
Finance terms as set out further below.

The Board approved these key terms and entered a sale and purchase agreement on 23 December
2021. The agreement was subject to a finance condition. This enabled the Board to ascertain total
interest costs in acquiring the Aldwins Facility and assess them against rent costs that would otherwise
be incurred. The finance condition was satisfied on 4 March 2022 following receipt of finance offers for
the BNZ Finance and the Senior Trust Finance which are detailed further below. In addition, the Board
considered the operating losses being incurred at the Aldwins Facility and projections for increases in
revenue at the Aldwins Facility (using an assumption of increasing occupancy at a rate of between 3-4
additional residents per month). This assessment was done for reassurance that the Group had the
financial capacity to fund AHL through to profitability. The Board was satisfied following these
assessments that acquiring the Aldwins Facility on the negotiated terms with the Vendor was in the best
interests of the Group and that there was a reasonable prospect of AHL becoming a contributor of profit
to the Group.

In completing due diligence enquiries and negotiating the Acquisition, the Board has relied on its
executive team (given its depth of sector and financial experience) together with external legal advice.
Other external consultants, such as building and engineering consultants were not engaged to assist in
the Acquisition given major strengthening and refurbishment works were undertaken on the Aldwins
Facility only two years ago and, since then, AHL has developed an extensive understanding of the
Aldwins Facility through its tenancy under the Lease.

OPERATING PERFORMANCE AT THE ALDWINS FACILITY

The Aldwins Facility is currently operating at a loss. The key driver of revenue for the Aldwins Facility is
occupancy rates. At the present time, 60 rooms (the downstairs of the Aldwins Facility) have been
opened. As at 4 March 2022, 52 of the 145 rooms are occupied by residents. The average monthly
occupancy is currently 34%.



AHL has an operating loss of $1.169m for the period 1 April 2021 to 31 January 2022. The monthly loss
is reducing as occupancy increases, resulting in increasing revenues, improving operational efficiencies
and fixed overheads being spread across higher gross earnings.

14521281_1 7
The Board estimates that breakeven for AHL will be achieved at an occupancy level of 80 residents
(55% occupancy) where the Aldwins Facility is leased. It is estimated that this will reduce to 70 residents
(48% occupancy) if the facility is owned. Cash breakeven is expected to reduce from 70 residents (55%)
to 60 residents (41%) if the facility is owned.

As announced recently, another aged care facility in Christchurch is closing and AHL has offered to take
on its 40 residents. Each resident must agree to transfer to the Aldwins Facility and an update on
occupancy will be given at the meeting.

The following information sets out the cash and non-cash monthly costs of leasing the Aldwins Facility
against the anticipated monthly costs of owning the Aldwins Facility:


Impact of moving from Lease to ownership of Aldwins Facility
Lease Scenario$
Monthly Lease payment 88,333
IFRS16 profit & loss lease reporting
Monthly depreciation of right to use asset55,596
Monthly interest cost on Lease47,688
Monthly Lease related costs charged to P&L103,284
Notes:
Ownership Scenario
Expected monthly loan interest costs are as follows
BNZ Finance7,500,000
Interest Rate5.22%
Senior Trust Finance1,500,000
Interest rate10.75%
Vendor Finance4,000,000
Interest rate6%
Estimated monthly interest costs66,100$
Incremental depreciation on building
Purchase price13,000,000
Government valuation of land1,430,000
Estimated value of building & PPE11,570,000
Estimated monthly depreciation over 50 years19,283
Total estimated interest cost plus depreciation85,383$
Estimated reduction in reported expenses17,901$
1. Other costs such as insurance, rates and routine repairs and maintenance are
already covered by AHL under the lease and will also be incurred from an ownership
perspective
2. Under ownership scenario the IFRS16 lease costs shown above are replaced by
interest expense.

14521281_1 8
Under IFRS rules the current lease is capitalised as a right of use asset (ROU) with a corresponding
lease liability. The ROU asset is then depreciated and interest, associated with the lease liability, is
charged on a monthly basis. These two items generate a charge to the AHL profit and loss of $103,000
per month. This compares to the monthly lease cash cost of $88,333 (plus GST) per month. The
following information sets out the anticipated balance sheet adjustments that will arise following the
Acquisition:



If AHL purchases the facility, operating costs will reduce by approximately $10,000 per month (difference
between IFRS accounting for the lease when compared to the loan interest costs plus building
depreciation). From a cash perspective operating cash flow will improve by approximately $20,000 per
month (difference between lease cost and interest on loans). These amounts may vary with changes in
interest rates on the BNZ Finance. In addition, two years following Completion, AHL will commence
making principal repayments on the Vendor Finance. AHL will need to continue to increase revenue
through occupancy growth at the Aldwins Facility to meet such medium to longer term payment
obligations or rely on financial support from the Group.

Following Completion, AHL will focus on increased sales and marketing activity at AHL to lift occupancy
rates to break even. The Board considers that the demographics driving the need for aged care facilities
will support its efforts to increase occupancy. AHL will also investigate development opportunities at the
Aldwins Facility to see if further investment (in the medium term) may increase its revenue earning
potential and capital value.

THE DEBT FACILITIES

The Purchase Price for the Acquisition is $13,000,000 plus GST (if any). The Purchase Price is to be
funded from three sources of debt:

• Vendor Finance: finance to be provided by the Vendor to AHL from Completion of $4 million;

Impact of Aldwins Facility Acquisition
Current Balance Sheet related to Aldwins House Property
As at 31 Jan 2022
Right to Use Asset
10,007,396


Right to Use Asset - Accumulated depreciation
722,756
-

9,284,640


Lease Liabilty
10,039,854
-

Net Liability
755,214
-

After acquisition
Aldwins House Land & Buildings (at purchase cost)
13,000,000


Debt on acquisition (at a Group level)
13,000,000
-

Net position
-


Net increase in assets
3,715,360


Net Increase in liabilities
2,960,146


Net improvement in reported net asset position relating to transaction
755,214


Note: on acquisition the lease liability will be washed out of the balance sheet
and replaced with the acquired asset and loans

14521281_1 9
• BNZ Finance: AHL drawing down a new debt facility from Bank of New Zealand of $7.5 million
at Completion; and

• Senior Trust Finance: Ranfurly Manor (the owner of the group’s Feilding based aged care
facility) increasing its existing debt facility with Senior Trust Retirement Village Income
Generator Limited by $1.5 million (from $5 million to $6.5 million) and making an intra group
advance to AHL.

Following Completion and based on the last completed valuations of the properties (which are between
six and twelve months old) the Group will own properties of an aggregate value of $46.9m and will have
total debt finance of $30.1 million representing 64.3% of the aggregate valuations.

Particulars of each Debt Facility and related security arrangements are as follows:

Vendor Finance

Term Five years following Completion
Principal sum of the loan $4,000,000
Ordinary interest rate 6% per annum (fixed for term)
Penalty interest rate 10% per annum
Interest payments Monthly, in arrears
Repayment – first two years of
the term
Interest only to be paid by AHL.
Repayment – final three years of
the term
Interest and principal payable by AHL, with principal repayments
to be no less than $20,000 per month
Security To secure the Vendor Loan, the following will be granted to the
Vendor:
• a second ranking mortgage over the Aldwins Facility; and
• a second ranking general security interest over all present
and after acquired property of Aldwins House Limited
(7832936) (a subsidiary of PHL).

BNZ Finance

Term Three years.
Principal sum of the loan $7,500,000
Ordinary interest rate Indicative rate of 5.22% per annum. This rate is variable and the
Board may look at fixing the rate in respect of all or part of the
loan following Completion depending upon the prevailing
interest rate environment. Fixed rates presently available are
1% - 1.7% higher than this indicative rate depending on the term
for term for fixing.
Interest payments Monthly, in arrears
Repayment Interest only to be paid by AHL.

14521281_1 10
Financial Covenants The Group must maintain a loan to value ratio of no more than
50%. Subordinated debt (such as the Vendor Finance) is
excluded from this LVR calculation. Based on the last
commissioned valuations for the Aldwins Facility and the
properties that the Group owns, following Completion the LVR
under this covenant will be 41.9%
The EBITDA of the Group must be maintained at a minimum of
2.0 times gross interest expense. Management modelling of this
covenant indicates the Group should satisfy this covenant with
a ratio of just under 3 times. The core assumption underlying
such modelling is maintaining occupancy rates at the Group’s
existing facilities and growing occupancy at the Aldwins Facility
as detailed above.
Security The following is to be provided to secure the Lender Facility:
• first ranking mortgage over the Aldwins Facility.
• first ranking general security over all present and after
acquired property of AHL.
• interlocking guarantee from AHL and each company in the
Group where each Group company guarantees the
obligations of the other to BNZ. This interlocking guarantee
is supported by general security agreements over each
member of the Group (which, other than in the case of
AHL, are already in place).

Senior Trust Finance

Term Four years from 30 October 2020
Principal sum of the loan $1,500,000 (as an increase to the existing $5 million facility of
which Ranfurly Manor is the Borrower)
Ordinary interest rate 10.75% per annum, fixed for the term of the loan.
Penalty interest rate 15.75% per annum
Interest payable from Completion
Interest payments Monthly in arrears
Repayment
Interest only payments are required during the Term with the
facility repayable in full at the end of the Term.
Ranfurly Manor may repay up to $1.25 million of the facility
annually from 30 October 2022 onwards.
Financial Covenants LVR ratio for Ranfurly Manor facility and the Nelson Street
facility is not to exceed 75% during the term of the facility. Based
on the last commissioned valuations for these properties, the
LVR under this covenant is 59.7%.
Security The following continues as security for the Senior Trust Finance:
• Second ranking mortgage over the land and building
owned by Ranfurly Manor.

14521281_1 11
• Guarantee of Ranfurly Manor’s obligations by PHL, Aged
Care Holdings Limited, Nelson Street Resthome Limited
and Ranfurly Manor Limited.

The following sets out the current debt facilities and key debt terms of the Group together with
summary information on the new Debt Facilities:



The Board has decided to finance the Acquisition through the Debt Facilities rather than raise new
capital as it considers that at the present time any capital raising would likely require such a raise to be
undertaken at a discount to PHL’s market price to be successful. The Board would prefer to raise capital
on terms advantageous to shareholders and believes that is more likely to occur where the capital is
being raised to support an entirely new acquisition and expansion of the Group’s operations.

The Vendor Finance was secured as an alternative to the Group raising capital to fund the Acquisition.
As the Vendor Finance has a fixed rate of interest at 6% per annum and a five year term, the Board
considered that this gave expense certainty and time for the Aldwins Facility to become a contributor of
profit to the Group. BNZ, as the Group’s principal financier offered to provide up to $7.5 million of first
mortgage finance on the Aldwins Facility. Senior Trust, as the Group’s current mezzanine finance
provider agreed to finance the $1.5 million difference. The Board considered that this mix of lending and
its average interest cost (compared to rental under the Lease) justified proceeding with the Acquisition.

As shown in the table above, no debt facilities of the Group mature for another 30 months. Over this
time debt will be paid down through profits earned from the Group’s operations. In addition, the Board
will pursue its growth strategy and continue to investigate new acquisitions in the aged care sector which
would likely involve the Group raising new capital and taking on more debt. As its debt facilities mature,
the Group will look to refinance based on the prevailing circumstances of the Group and the prevailing
availability of credit.

OTHER PROVISIONS TO THE ACQUISITION

If the Acquisition is approved by shareholders, Completion will occur on or before 31 March 2022 unless
an extension is agreed with the Vendor. Shareholder approval is the sole outstanding condition.

The Acquisition is documented in a customary form of agreement for sale and purchase of real estate
and, in light of AHL currently tenanting the Aldwins Facility, provides that AHL is acquiring the Aldwins
Group Debt Structure
Existing Drawndown Facilities
Current
Loan Value
($)
Interest
Rate
Term
(Months)RepayableComments
Senior Trust
Ranfurly Manor5,000,00010.75%48Sep-24Interest only
BNZ
Eileen Mary2,900,000Floating36Oct-23Interest only
Ranfurly Manor5,430,000Floating36Oct-23Interest only
Ranfurly Manor2,659,9402.29%60Oct-25P&I
Nelson St1,170,000Floating36Oct-23Interest only
12,159,940
Total Existing Loan Facilities17,159,940
Proposed New Lending
Vendor Finance4,000,0006%60Mar-27Interest only (2 years) then also $20k principal per month
BNZ Finance7,500,0005.22%36Mar-25Three year interest only
Senior Trust Finance1,500,00010.75%30Sep-24Extension to existing facility
13,000,000
New Total Debt Facilities30,159,940

14521281_1 12
Facility on an ‘as is, where is’ basis. All fixtures and fittings at the Aldwins Facility are included in the
Acquisition.

EFFECTS OF RESOLUTION

Effect of Resolution passing

If the Resolution is passed and Completion occurs:

• AHL will own Aldwins Facility, adding to its portfolio of owned aged care facilities in New Zealand.
The Aldwins Facility will be the first aged care facility that PHL has acquired in a main city of New
Zealand and its first in the South Island;

• AHL’s operating expenses will immediately reduce by paying interest costs rather than rent costs;
and

• AHL will place an increased sales and marketing focus on building occupancy at the Aldwins
Facility with a goal of reaching profitability as quickly as possible.

The key risks associated with the Acquisition are:

• failing to increase occupancy levels to reach profitability at the Aldwins Facility and operating
profits at PHL’s other three other aged care facilities being insufficient to fund continued losses
at the Aldwins Facility.

• As occupancy grows at the Aldwins Facility, securing the necessary staffing (particularly
nurses). As reported widely in the media there is a national shortage of nurses at the present
time. The COVID-19 pandemic has exacerbated this issue for the aged care sector due to
border closures and vaccine mandates reducing the availability of labour. As pandemic
restrictions are lifted it is expected that this risk will reduce.

• The increase in group debt associated with funding the acquisition of the Aldwins Facility. The
BNZ Finance is on a variable interest rate and interest costs associated with that lending may
increase. In addition, when Group debt facilities mature, the Group must either refinance those
facilities or repay them from the proceeds of a capital raising or asset sales. There is no
assurance that they will be able to be refinanced.

Effect of Resolution not passing

The effect of the Resolution not passing is as follows:

• AHL will not complete the Acquisition. AHL will continue to lease the Aldwins Facility from the
Vendor at a cost that is higher than the cost of servicing the Debt Facilities meaning AHL will
require greater financial support for longer from the Group before reaching profitability;

• PHL will consider the ongoing viability of the Aldwins Facility against other uses of capital for
growing shareholder value. Alternatives would include looking to sell the business and Lease of
the Aldwins Facility or otherwise winding up AHL; and

• The Group will incur sunk costs of approximately $120,000 in having pursued this acquisition
through legal fees, registry fees, regulatory fees and finance establishment charges.

REQUIREMENTS FOR RESOLUTION

Shareholder approval is required under Listing Rule 5.1.1(b) by way of ordinary resolution.

Listing Rule 5.1.1(b) provides that, except with the prior approval by an ordinary resolution, PHL may
not enter into any transaction or series of transactions to acquire, sell, exchange, or otherwise dispose
of assets of PHL in respect of which the gross value is in excess of 50% of the average market
capitalisation of PHL.

14521281_1 13

The Acquisition constitutes a ‘transaction’ under Listing Rule 5.1.1(b). In particular, the Acquisition
involves PHL acquiring assets having a gross value that exceeds 50% of the average market
capitalisation of PHL in that PHL’s average market capitalisation at 23 December 2021 (being the date
that shareholders were publicly notified of the Acquisition through the NZX market) was approximately
$21,285,000 and PHL will acquire the Aldwins Facility for a market value of $13,000,000.

The Acquisition does not constitute a major transaction for the purposes of section 129 of the Companies
Act 1993.

14521281_1 14
GLOSSARY

The following terms have the following meanings where used in this Notice of Meeting unless the context
otherwise requires:

Acquisition means the acquisition by AHL from the Vendor of the Aldwins Facility, further described in
this Notice of Meeting;

AHL means Aldwins House Limited (company number 7832936), a wholly owned subsidiary of PHL.

Aldwins Facility means the land and buildings at 62 Aldwins Road, Phillipstown, Christchurch operating
as an aged care facility;

BNZ Finance means the $7.5 million facility to be provided to AHL at Completion by Bank of New
Zealand and described in this Notice of Meeting;

Board means the board of directors of PHL;

Completion means completion of the Acquisition under the Purchase Agreement;

Debt Facilities means the Vendor Finance, the BNZ Finance and the Senior Trust Finance;

EBITDA means earnings before interest, tax expense, depreciation and amortisation of intangibles;

Explanatory Notes means the explanatory notes that form part of this Notice of Meeting;

Group means PHL and subsidiaries;

IFRS means New Zealand equivalents to international financial reporting standards;

Lease means the lease of the Aldwins Facility between AHL (as tenant) with the Vendor;

Listing Rules means the NZX Listing Rules dated 10 December 2020 and Listing Rule means a rule
contained in the NZX Listing Rules;

Meeting means the special meeting of shareholders of PHL to be held on 30 March 2022, starting at
11am;

Notice of Meeting or Notice means this notice of special meeting, including the Explanatory Notes;

NZ RegCo means NZX Regulation Limited;

PHL means Promisia Healthcare Limited;

Proxy Form means a proxy form in relation to this Notice of Meeting, a personalised copy of which
accompanies this Notice of Meeting;

Purchase Agreement means the Agreement for Sale and Purchase of Real Estate between AHL and
the Vendor dated 23 December 2021;

Purchase Price means $13,000,000 (plus GST, if any);

Ranfurly Manor means Ranfurly Manor No:1 Limited, a wholly owned subsidiary of PHL;

Resolution means the resolution set out in this Notice of Meeting;

Senior Trust Finance means the $1.5 million facility extension to be provided to Ranfurly Manor at
Completion by Senior Trust Retirement Village Income Generator Limited and described in this Notice
of Meeting;

14521281_1 15
Vendor means Teltower Limited (company number 1337170); and

Vendor Finance means the loan of $4 million to be provided by the Vendor to AHL at Completion as
described in this Notice of Meeting.

---

14481403_1














LODGE YOUR PROXY
Online:
https://investorcentre.linkmarketservices.co.nz/voting/PHL

Scan & email:
meetings@linkmarketservices.com Mail:
Use the enclosed reply paid
Deliver: envelope or address to :
Link Market Services Link Market Services
Level 30, PwC Tower PO Box 91976
15 Customs Street West, Auckland 1010 Auckland 1142
Scan this QR code with your smartphone and vote online

General Enquiries

+64 9 375 5998 | enquiries@linkmarketservices.com

PROXY FORM/ADMISSION CARD PROMISIA HEALTHCARE LIMITED SPECIAL MEETING OF SHAREHOLDERS

The Special Meeting of Shareholders of Promisia Healthcare Limited (the Company) will be held online via the Link Market Services Virtual
meeting platform at www.virtualmeeting.co.nz/phlsm22, on Wednesday, 30 March 2022, commencing at 11am.

Appointment of proxy
If you DO NOT propose to ATTEND the Special Meeting online, please complete and return this form (in accordance with the lodgement instructions
above) to be received by Link Market Services (the share registry), no later than 11am on Monday, 28 March 2022. You can also appoint your
proxy and vote on the resolutions on the reverse of this form online by going to https://investorcentre.linkmarketservices.co.nz/voting/PHL or by
scanning the QR code above with your smartphone. Your proxy need not be a Shareholder of the Company. You may appoint any of the Directors
as your proxy by entering “Director” in the relevant space on the reverse of this form followed by their name. Any Director who is appointed as a
discretionary proxy intends to vote in favour of the Resolution.

Voting of your holding
Direct your proxy how to vote by making the appropriate election, either online or on this Proxy Form, in respect of the item of business. If you
return this form without directing the proxy how to vote on any particular matter the proxy may vote as he/she thinks fit or abstain from voting If
this Proxy Form is returned duly signed by a Shareholder with voting instructions included, but without specifying a person that is appointed as
proxy, the Chair is deemed to be the proxy for the purpose of that form, but only to vote to the extent of the voting instructions provided.

Attending the Meeting
The Special meeting will be an online Meeting only. Shareholders may attend and vote at www.virtualmeeting.co.nz/phlsm22. If you will be
attending online, you will require your Holder Number for verification purposes. A corporation may appoint a person to attend and vote online as
its representative in the same manner as that in which it could appoint a proxy. That person need not also be a shareholder.

Signing instructions for proxy forms

Individual
Where the holding is in one name, the shareholder must sign the Proxy Form.

Joint Holding
If you are joint holders of shares, either of you may sign this Proxy Form. If the shareholder is a company, this Proxy Form must be signed on
behalf of the company by a person acting under the company’s express or implied authority.

Power of Attorney
If this Proxy Form has been signed under a power of attorney, a copy of the power of attorney under which it was signed (if not previously provided
to the Registrar), and a signed certificate of non-revocation of the power of attorney must accompany this Proxy Form.

Corporate Shareholder
In the case of a corporate shareholder, a duly authorised officer or director must sign this Proxy Form. Persons who sign on behalf of a corporate
shareholder must be acting with that corporate shareholder’s express or implied authority, or execute under the common seal of the corporate
shareholder (if it has one).




Go online to https://investorcentre.linkmarketservices.co.nz/voting/PHL to vote or turn over to complete the Proxy Form

14481403_1



PROXY/CORPORATE REPRESENTATIVE FORM

STEP 1: APPOINT A PROXY TO VOTE ON YOUR BEHALF
I/We being a shareholder/s of Promisia Healthcare Limited:

hereby appoint _____________________________________________at________________________________________________
(Full Name) (E-mail Address)

Or failing him/her_________________________________________at________________________________________________
(Full Name) (E-mail Address)
as my/our proxy to vote for me/us on my/our behalf at the Special Meeting of the Company to be held at 11am on Wednesday, 30 March 2022
and at any adjournment of that meeting.

STEP 2: ITEMS OF BUSINESS – PROXY VOTING INSTRUCTIONS
Complete this part if you have appointed a proxy above and you want to direct the proxy as to how the proxy should vote.
Please note: For each resolution you must tick one box. If you mark the abstain box for an item, you are directing your proxy not to vote on
your behalf when polling and your votes will not be counted computing the required majority, for that item.

To consider and, if thought fit, pass the following ordinary resolution:

Tick (✓) in box to vote
For Against Abstain Discretion
RESOLUTION

1.
Approval of Acquisition: That, under Listing Rule 5.1.1(b), PHL undertaking the
Acquisition and entering all associated financing for the Acquisition on the basis
described in this Notice of Meeting is approved.

   

and to vote on any resolutions to amend any of the resolutions, on any resolution so amended, and on any other resolution proposed at the meeting (or
any adjournment thereof). Unless otherwise instructed as above, the proxy will vote on each resolution as he/she sees fit, or may abstain from voting.
The proxy is appointed only in respect of the above meeting or any adjournment thereof.

STEP 3: SHAREHOLDER QUESTIONS
Shareholders attending the Meeting will have the opportunity to ask questions during the Meeting via the virtual meeting platform at
www.virtualmeeting.co.nz/phlsm22. If you cannot attend the Meeting but would like to ask a question, you can submit a question online by going to
investorcentre.linkmarketservices.co.nz/voting/PHL and completing the online validation process or complete the question section below and return
it to Link Market Services. Questions will need to be submitted by 11am. (New Zealand time) on Monday, 28 March 2022. The Board will address and
answer questions at the Meeting.







STEP 4: SIGN: SIGNATURE OF SHAREHOLDER(S) This section must be completed
Shareholder 1 Shareholder 2 Shareholder 3



or duly authorised officer or attorney or duly authorised officer or attorney or duly authorised officer or attorney

Contact Name __________________________________ Contact Daytime Telephone _______________________ Date ____________
Electronic Investor Communications: If you received the Notice of Meeting and Proxy Form by mail and wish to receive your future investor
communications by e-mail please provide your email address below.
Question: