MEDIA RELEASE 28 APRIL 2020 METLIFECARE REJECTS NOTICE TO TERMINATE SCHEME IMPLEMENTATION AGREEMENT Metlifecare Limited (NZX: MET, ASX: MEQ) has today received a notice to terminate the Scheme Implementation Agreement (SIA) entered with Asia Pacific Village Group Limited (APVG), an entity owned by EQT Infrastructure IV fund and managed by EQT Fund Management S.à.r.l. The Metlifecare Board has rejected the notice to terminate from APVG as entirely invalid and reiterates its belief, based on legal advice, that there is no lawful basis for APVG to terminate the SIA. Under New Zealand law, an invalid termination is treated as a ‘repudiation’ of the contract enabling the non-defaulting party to elect to either (i) cancel the contract and seek damages or (ii) continue with the contract and require the defaulting partly to perform its obligations. Metlifecare remains strongly committed to the successful completion of the scheme in the interests of all shareholders and remains on track to dispatch the scheme materials ahead of a shareholder meeting to vote on the scheme, intended to be held at 11am on 9 June as a ‘virtual’ meeting, subject to receipt of orders from the High Court. Metlifecare Chair Kim Ellis said: “The fundamental assumptions that APVG uses to justify its Notice to Terminate are simply wrong. There has been no breach of the ‘Material Adverse Change’ (MAC) metrics and/or any ‘Prescribed Occurrence’, as claimed by APVG, and such breaches, if they were to occur, would be covered in either case by specific exceptions under the SIA. Metlifecare considers APVG and its parent company EQT have misstated the terms of the SIA and are wrongly attempting to withdraw from an agreement they willingly entered less than four months ago. We expect them to honour their obligations under the SIA.” On 8 April 2020, Metlifecare informed the market that it had received from APVG a notice of its intention to terminate the SIA. Metlifecare’s response to APVG’s accusations, which the Board considers are without foundation, was summarised in its Market Update on 20 April 2020. Metlifecare’s position is further detailed in its formal response to the notice of intention to terminate, which was provided to APVG on 23 April 2020 and is attached to this release. In summary, among other matters the Board notes that: On the basis of information available to it, Metlifecare does not consider either of the MAC metrics – related to consolidated net tangible assets (NTA) and consolidated underlying net profit – has been triggered or is reasonably likely to be triggered; To the extent there may have been a reduction in Metlifecare’s consolidated NTA or its reasonably expected consolidated underlying net profit, this is the result of changes in general economic conditions or changes in law as part of the New Zealand government’s Level 4 lockdown restrictions. Changes in general economic conditions and changes in law are carve- outs under the MAC; Page 1 of 2 There is no basis to suggest that these changes in general economic conditions and changes in law have had a materially disproportionate effect on Metlifecare, as would be required under the MAC; and Metlifecare has, at all times, provided information where reasonably requested by APVG under the SIA. In any event, none of the matters that have been the subject of the recent detailed communications between the parties are sufficiently material to the group as a whole to justify termination, even if there had been any breach in respect of them. As foreshadowed on 20 April, Metlifecare has retained the services of Stephen Hunter QC to assist it, alongside top tier New Zealand law firm Chapman Tripp. Metlifecare shareholders do not need to take any action at this time. This announcement is authorised for release to the market by the Board of Metlifecare Limited. Ends For more information please contact: Clive Mathieson [email protected] Mobile: +61 411 888 425 About Metlifecare Metlifecare is a leading New Zealand owner and operator of retirement villages, providing rewarding lifestyles and outstanding care to more than 5,600 New Zealanders. Established in 1984, it currently owns and operates a portfolio of 25 villages in areas with strong local economies, supportive demographics and high median house prices, located predominantly in New Zealand’s upper North Island. Page 2 of 2 23 April 2020 Nathalie Brabers-Jastrow EQT Fund Management S.à r.l. (acting as Asia Pacific Village Group Limited manager (gérant) of the fund known as c/- Bell Gully Level 22 Vero Centre EQT Infrastructure IV Fund) 48 Shortland Street 26A, Boulevard Royal, L-2449 Luxembourg Auckland 1010 Email: [email protected] New Zealand Email: [email protected]/ [email protected]/ [email protected] EQT Fund Management S.à r.l. (acting as manager (gérant) of EQT Infrastructure IV with a copy to: EUR SCSp and EQT Infrastructure IV USD SCSp) 26A, Boulevard Royal EQT Partners Singapore Pte Ltd, L-2449 Luxembourg 1 Raffles Place, #29-62 One Raffles Place Grand Duchy of Luxembourg Tower 2, Singapore 048616 Email: [email protected] Email:[email protected] Dear Nathalie APVG’s 7 April 2020 notice of intention to terminate SIA We refer to your 7 April 2020 Notice of Intention to Terminate the Scheme Implementation Agreement between Metlifecare Limited and Asia Pacific Village Group Limited, dated 29 December 2019 (Notice). Metlifecare does not consider there to be any ground for a valid termination, for the reasons summarised in this letter. Your fundamental assumption is not correct Underlying your Notice is the fundamental assumption that COVID-19 has caused and will cause serious, widespread and lasting detriment to Metlifecare’s business. That is not the case. The five week Level 4 lockdown (lockdown) has created some immediate practical issues for the business, and in the short to medium term the general economic conditions are likely to be less favourable, but the virus itself has not damaged Metlifecare’s business or business model. Metlifecare is currently operating under the New Zealand Government’s stringent Level 4 lockdown restrictions. These restrictions came into effect at 11.59pm on Wednesday 25 March 2020. The lockdown is to remain in place until 11.59pm on Monday 27 April 2020, at which point New Zealand will move to the recently announced Level 3 restrictions. As an operator of retirement villages and care homes, Metlifecare, like its sector peers, is an “essential services” provider, which means it is able to continue operating its villages and care homes providing core services to residents. Current village and care home occupancy levels are high. ILU occupancy has been at 97% for well over a year. Aged care occupancy has increased during the period of lockdown from 93% to 95%, as two new care homes (Papamoa Beach Village and The Avenues) filled up. Aged care occupancy was 92% as at the end of February. Metlifecare is continuing to actively advertise and approach prospective residents, however, under the lockdown, Metlifecare, like its sector peers, is restricted from showing prospective residents around its villages. In the few days prior to the commencement of the lockdown, ten Occupation Right Agreement settlements were brought forward at the request of incoming residents to allow them to move into their new homes ahead of the lockdown being imposed. As expected, as a result of the current restrictions, 32 settlements are temporarily delayed. Ten settlements have still occurred during lockdown. From this point through to the end of May 2020, we are anticipating around 50 settlements. In line with the lockdown requirements, Metlifecare and its development partners have also temporarily paused all construction activity. You have received considerable detailed information on those temporary pauses in construction. Metlifecare is now preparing its transition as New Zealand moves out of the Level 4 lockdown and into Level 3 from Tuesday 28 April 2020. At Level 3, removal companies will be allowed to operate as needed to allow residents to move into their units, and so all the currently delayed and planned settlements can proceed. Sales activity is expected to increase, with prospective residents able to make appointments to view villages, however Metlifecare is still unable to organise open days, or permit prospective residents to turn up unannounced. Construction activity will also re-commence. You cite four factors in particular in your Notice: 1. You say that the elderly are particularly vulnerable. 2. You say that COVID-19 cases have occurred in NZ aged care facilities and retirement villages. 3. You record that retirement village operators have taken certain actions. 4. You allege that the continuing impact of COVID-19 is materially adverse. Metlifecare strongly disagrees with your conclusion, which we consider to be overly simplistic. In overview, it is not correct to characterise COVID-19 as a pandemic that, in and of itself, will cause widespread harm to either the retirement village sector or Metlifecare. COVID-19 in New Zealand The spread of COVID-19 in New Zealand differs from the experience in other countries, including Sweden. In New Zealand, infection and transmission rates to date have been much higher in younger age groups. The spread to those 70 years and over is low compared to other developed countries. 2 New Zealand cases by age1 The death rate in New Zealand is one of the lowest in the world.2 New Zealand has had much lower rates of community transmission than in other countries.3 It is correct that stand-alone aged care facilities have been at the centre of some of the “clusters” of infection in New Zealand. Those facilities are not retirement villages, and operate very differently to Metlifecare.