Why Babylon Stock Is Nosediving Today
Babylon Holdings Limited (NASDAQ: BBLN) entered into an amendment and restatement of its senior secured term loan facility with AlbaCore Capital for up to an additional $34.5 million in funding.
The Interim Funding will provide liquidity to support Babylon's operations and enable Babylon to proceed with the proposed longer-term funding.
Under the Framework Agreement, Babylon and AlbaCore expect to proceed with a restructuring and recapitalization that will strengthen Babylon's balance sheet and provide additional liquidity to deliver on Babylon's strategic plan.
Concurrently, the company reported Q1 sales of $311.1 million compared to $266.4 million a year ago, primarily due to the growth in VBC revenue, but missing the consensus of $337.35 million.
The company reported deeper losses of $(63.23) million, compared to $(29.1) million a year ago.
Babylon said that in light of its interim financing and proposed take-private transaction to be led by AlbaCore Capital LLP and affiliates, the company has withdrawn its full-year 2023 revenue and Adjusted EBITDA guidance and its mid-2024 target for Adjusted EBITDA profitability.
The company expected FY23 adjusted EBITDA loss of $(120) million-$(100) million compared to $(274.5) million in 2022.
Babylon expected to achieve Adjusted EBITDA profitability in mid-2024.
As of March 31, 2023, the company had cash and cash equivalents of $77.7 million.
Price Action: BBLN shares are down 66.9% at $2.34 on the last check Wednesday.
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