StockTalk

Good evening everyone,

Below is the proposal I have submitted to Oceania Healthcare Limited for voting in the 2026 Annual Meeting with the resolution and explanatory statement. It recommends the Board commission an independent strategic review to address the long-standing discount between Oceania's share price and its net tangible asset backing, currently around $0.74 against $1.62 per share. The proposal file is available to download on my Substack (https://scrivenercapital.substack.com/p/strategic-review-proposal-oceania).

PROPOSED RESOLUTION:
"That shareholders recommend that the Board commission an independent strategic review of Oceania Healthcare, with the objective of identifying options to maximise shareholder value and to address the long-standing discount of the Company's share price to its net tangible asset backing, and that the Board report the findings of that review to shareholders."

EXPLANATORY STATEMENT :
Public market undervaluation
Oceania's shares have traded persistently and substantially below the value of the company's underlying assets. This is not a short-term aberration. At the closing price of $0.74 on the 15th of June, the market is valuing the company at only 46 cents for every dollar of its net tangible asset backing of $1.62 per share. Shareholders are being asked to consider whether a formal, independent strategic review is warranted.

Oceania listed in May 2017 at an issue price of $0.79 per share. In March 2021 it raised $100 million of new capital, with the placement priced at $1.30 per share. Nearly a decade after listing, the shares continue to trade below the original issue price and well below the 2021 raise price. Shareholders who supported the company at its IPO have seen the shares remain below the price they paid, and those who supported the 2021 raise have seen a substantial decline in the value of that investment.

This has occurred despite real operational progress. Oceania has more than tripled total assets (from $918 million at FY2017 to $3,076 million), reweighted its portfolio towards independent living units, and grown net tangible assets per share from $0.74 (FY2017) to $1.62.

Where a company's shares trade for years at a substantial discount to the value of its assets, it is reasonable for shareholders to ask the Board to commission an independent review of the options to close that gap.

Strategic review avenues
Options to unlock value for shareholders could (by way of example) include:

Sale or takeover. Appetite for our company could be tested amongst private equity, infrastructure funds and trade buyers by inviting expressions of interest. The sector offers a fairly recent benchmark. In 2024 Arvida Group was acquired by Stonepeak, a private capital firm, at $1.70 per share. This represents an 82% premium to Arvida's volume-weighted average price over the 30 trading days before the announcement.

Breakup value. The portfolio's realisable value could be independently assessed through an orderly, staged sale, with the proceeds returned to shareholders. Oceania's recent divestments, described by the company as having "sold at or around carrying value", indicate the rest of the assets are likely worth near book. With the shares well below net tangible assets per share, even village sales at a discount to carrying value would deliver a substantial uplift for shareholders.

Accretive buybacks funded by asset sales. Where assets can be realised at or near their carrying value, the cash raised can fund value-accretive share buybacks. So long as the shares trade below net tangible assets, each share repurchased is bought for less than the roughly $1.62 of net assets standing behind it, lifting NTA per share. Buybacks place an additional buyer in the market, which should help close the NTA gap. If debt is the primary concern, applying 30% of the proceeds, which is the current gearing ratio, to debt and 70% to buybacks holds gearing constant.

This resolution simply puts the question on the table, what is the Board prepared to do to close the persistent discount the shares suffer from?

A vote in favour risks nothing; it asks only that the options to close the gap between the share price and the $1.62 of net tangible assets per share be examined, and the findings reported back to the shareholders who own the company.

Yours sincerely,

Thomas Scrivener

tommyscrivener1@gmail.com