SOURCE: Permian Investment Partners

July 15, 2011 12:09 ET

Letter to the CEOs of National Australia Bank and Commonwealth Bank of Australia from Permian Investment Partners of New York; requesting that the Banks agree to a refinancing that will secure the future of Healthcare Locums PLC, the leading provider of healthcare personnel in Australia and the UK; and copying The Hon Nicola Roxon MP, Minister for Health and Ageing

NEW YORK, NY--(Marketwire - Jul 15, 2011) - Letter issues by Permian Investment Partners to the Chief Executives of National Australia Bank and Commonwealth Bank of Australia

15 July 2011

Mr. Cameron Clyne
Chief Executive Officer
National Australia Bank Ltd
Level 4
800 Bourke Street
Melbourne, VIC 3008

Mr. Ralph Norris
Chief Executive Officer
Commonwealth Bank of Australia Ltd
Ground Floor Tower 1
201 Sussex Street
Sydney, NSW 2000

Copied: The Hon Nicola Roxon MP, Minister for Health and Ageing

Dear Sirs:

We are writing to bring to your attention a crucial and time-sensitive situation about which you may or may not be aware. Commonwealth Bank of Australia and National Australia Bank (collectively the "Banks" or "you") comprise the senior lending consortium of Healthcare Locums plc ("HCL"), which, in turn, owns 100% of Healthcare Australia Pty Ltd ("HCA"). HCA is Australia's leading provider in highly skilled nurses, professional care workers, technicians and other important healthcare professionals critical to Australia's healthcare system. As HCL shareholders we are very aware of this situation. By way of background, you extended a senior loan to HCL in December 2010 as part of its acquisition financing of HCA.

Shortly after the financing was extended the loan went into default when the then current HCL Chairman suspended the Vice Chairman, Finance Director and stock due to "accounting irregularities." While I won't review all the details of the events surrounding HCL in this letter, it should go without saying that all stakeholders (i.e., banks and shareholders alike) were shocked and angered by these events. A handful of HCL's top shareholders have been working tirelessly during the past six months to formulate a number of creative solutions to ensure HCL's survival.

We have assembled a go-forward plan to stabilize and grow the business and assembled a number of leading healthcare executives to comprise the new Board with relevant and proven industry and restructuring/turnaround experience. Your loan officers in charge of this loan have been in possession of our rescue plan, but we have heard nothing back from them. Your advisors, Zolfo Cooper, have informed us that our plan is not of interest and, instead, your institutions prefer to work with vulture funds who can offer a few more pennies on the dollar, but who will subsequently subject the business to a radical reorganization / pre-packaged bankruptcy, which would undoubtedly destroy the organization. To put the issue in perspective, the magnitude of the loan, based on your combined gross loan portfolios reported at year-end 2010, is less than 0.0001% of total gross loans, whereas the magnitude of the social ramifications of letting such a business fail is frankly unquantifiable.

The status quo is simply untenable and in no one's interest. HCL's two Non-Executive Directors (one of whom is Chairman) lack the support of shareholders. More importantly, they lack the support of key employees and locum workers, who are voting "no confidence" with their feet and leaving for competitors. This has resulted in declining revenue and operating profit. Meanwhile, advisors appointed by your firms are collecting excessive fees, which are further draining HCL's financial resources during this strenuous time. In summary, unless the status quo is altered immediately HCL will go bankrupt and your ability to recover your loan will be severely jeopardized. More importantly, HCL's bankruptcy will have immediate and detrimental implications for HCA and its ability to supply quality healthcare professionals in Australia.

There is a better alternative, which we believe will prove superior to all stakeholders. You are in possession of a plan submitted by shareholders to ensure the survival of HCL. Our plan is to replace HCL's two Non-Executive Directors (including Chairman) with six new Non-Executive Directors, including a new Chairman. One issue with HCL's current Non-Executive Directors is that they lack relevant industry and turnaround/restructuring experience. Not only has this impaired HCL's ability to stabilize and return to growth, but also it has led to the departure of key employees and locum workers. In contrast, our Board has relevant and proven industry and restructuring/turnaround experience. Our Board knows how to run a healthcare staffing company. They know what HCL is doing incorrectly and what specific steps must be taken to reverse its current destructive path. Our Board has a proven and successful track record in restructurings/turnarounds, and is fully prepared to begin working at HCL tomorrow.

The asset value of HCL and HCA is completely intangible, as key recruiters walk in and out of the door every day. Time is critical. The longer the current Board and its onerously expensive advisors are in place, the probability stakeholders have at recovering value. Moreover, a delay in action will result in HCL and HCA's bankruptcy and negatively impact the delivery of healthcare professionals in Australia. Thus, timing is critical and we urge you to act quickly to allow HCL to save itself. By not acting quickly, you are assuring that value is destroyed for all stakeholders and potentially contributing to the decline in quality of healthcare in the UK and Australia. Our plan to save HCL is credible and can be implemented immediately. We welcome the opportunity to discuss this letter with you in greater detail.

Regards,

Cara Goldenberg

Partner
Permian Investment Partners

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