London-headquartered telehealth company Babylon is now facing the prospect of bankruptcy after the proposed rescue merger by Swiss firm MindMaze collapsed.
The rescue deal by MindMaze, which would have taken US-listed Babylon private, was first announced by the company on 23 June.
An update posted to Babylon’s website states: “Following Babylon’s receipt of funding under its amended bridge notes facility with AlbaCore, Babylon has no binding commitment for additional financing to continue its business operations.”
Babylon says it is now exploring other options “to find the best possible outcome for its UK business”. One option is divesting its UK business to “third parties that may provide financing to assure the continuity of the operations”.
On the brink of bankruptcy
In the US, Babylon has been scaling back operations amid mounting losses. It announced the sale of its Meritage Medical Network unit last year.
The health tech company, once considered one of Britain’s promising startups, said it will file for bankruptcy for any parts of the business where it cannot secure additional funds from third parties.
The remote healthcare app was delisted from the New York Stock Exchange in June. The deal to take it private with MindMaze would have wiped out previous shareholders.
Its first quarter results for 2023 showed revenue of $311.1m and a net loss of $63.2m.
On the same day as publishing its first quarter results, Babylon revealed it had agreed up to $34.5 of capital from AlbaCore to keep it running, with plans to raise more and go private.
Babylon went public in June 2021 via a merger with a special purpose acquisition company, or SPAC.