Why Babylon Stock Is Nosediving Today

Babylon Holdings Limited 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financing and proposed take-private transaction to be led by AlbaCore Capital LLP and affiliates, the company has withdrawn its full-year 2023 revenue and Adjusted EBITDA guidance and its mid-2024 target for Adjusted EBITDA profitability.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.