Shares in beleaguered digital health firm Babylon Health fell sharply today on news that the company is to be taken private as part of a new debt plan.
Shares, which had stood at $6.88 (£5.45) on Tuesday, fell to $2.17 (£1.72) by lunchtime Wednesday.
Babylon Holdings Limited on Wednesday announced a new funding agreement with Albacore Capital LLP, which will provide up to $34.5m (£27.3m) in interim funding to provide liquidity to support Babylon’s ongoing operations.
As part of a longer-term funding plan, that includes restructure of Babylon’s debt, it is envisaged that Babylon will return to private ownership.
This sale will occur without the approval of or any payment to Babylon Holdings Limited’s Class A ordinary shareholders, with AlbaCore exercising rights under its debt agreements with Babylon.
Babylon’s Board of Directors has approved the Interim Funding and the Take Private Proposal as a constructive step to deliver a longer-term solution to support the Go-Forward Business’s continued path toward profitability.
Babylon’s which publicly listed in the US in 2021 following a special acquisition company (SPAC) deal. At its peak in October 2021, shares were valued at $272.5 (£215m), meaning that Wednesday’s valuation was less than 1% of the 2021 peak.
Last year, the CEO of Babylon Health Dr Ali Parsa confirmed that the company loses money on “every member that comes in”.