Babylon is seeking to sell off its UK business amid financial troubles, which could include its GP at Hand operation serving 100,000 NHS patients in London.
Yesterday the company confirmed that a planned merger with digital therapeutic platform MindMaze had failed, and as such it will have to ‘wind down’ its US operations while also pursuing the ‘divestiture of its UK business to third parties’.
If it is unable to secure ‘additional financing’, Babylon has said some of its operations ‘will file for bankruptcy protection’ or other routes for an ‘orderly wind down’ or ‘liquidation’.
However, Babylon has also emphasised in a press statement that ‘there will be no impact to the services we provide to our NHS GP at Hand’.
A Babylon spokesperson said: ‘We are in active discussions with a number of potential investors and partners to secure the financial future and continuity of the UK operation either as a standalone entity or in partnership with another body.’
Pulse exclusively revealed earlier this year that Babylon had indefinitely suspended out-of-area patient registrations for GP at Hand.
And its website currently says it is registering patients based in Fulham, West London, only.
In April, Babylon said it had no plans to pull out of providing care to its NHS patients in London and suggested its financial woes had been inaccurately reported.
The company’s NHS arm GP at Hand became the first practice in England to register more than 100,000 patients on a single list in August last year. However, its Birmingham operation was forced to close in November as part of a strategy of ‘winding down’ unprofitable NHS contracts.
After its merger fell through yesterday, Babylon received funding under an amended short-term financing agreement with the investment firm AlbaCore Capital LLP.
This means the company now ‘has no binding commitment for additional financing to continue its business operations’ and is consequently ‘exploring new strategic alternatives in order to find the best possible outcome for its UK business’.
Its press statement said: ‘The Group is pursuing the divestiture of its UK business to third parties that may provide financing to assure the continuity of the operations.
‘Babylon has built a successful, distinct and sustainable UK business which provides high quality healthcare to many.
‘However, it cannot provide assurance that any of these initiatives will result in Babylon entering into a definitive agreement for or completing a divestiture.’
It added: ‘In order to explore these opportunities for a Third Party Sale and enable business continuity, Babylon is in discussions with potential strategic partners to secure additional funding.
‘Babylon cannot provide assurance that it will be able to secure sufficient liquidity to fund the operations of the Group’s businesses.
‘To the extent that Babylon is unable to secure additional financing and complete a Third Party Sale of a particular business, the applicable entities of the Group will file for bankruptcy protection or implement other alternatives for an orderly wind down and liquidation or dissolution, which may include commencing Chapter 7 proceedings under the U.S. Bankruptcy Code and/or a UK administration for the applicable entities of the Group in the near term.’
Upon launching GP at Hand as a mobile GP service which registered out-of-area patients for remote consultations, Babylon was accused by critics of ‘cherry-picking’ younger, healthier patients, leaving other practices to care for patients with greater needs.
However, last year CEO Dr Ali Parsa said the company needed to be ‘super careful’ about expanding its UK GP services as it loses money on every patient, with accounts revealing the NHS GP at Hand arm was reliant on profits from the private side of the business.
What is a ‘third party sale’? Are they talking about keeping money from selling us to other providers?
And why should shareholder profits be protected from bankruptcy? – surely not!
I met a traveller from an antique land,
Who said—“Two vast and trunkless legs of stone
Stand in the desert. . . . Near them, on the sand,
Half sunk a shattered visage lies, whose frown,
And wrinkled lip, and sneer of cold command,
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them, and the heart that fed;
And on the pedestal, these words appear:
My name is Ozymandias, King of Kings;
Look on my Works, ye Mighty, and despair!
Nothing beside remains. Round the decay
Of that colossal Wreck, boundless and bare
The lone and level sands stretch far away.”
GP at Hand is surely worth very little as they cannot sell goodwill under the GMS contract.
Everything else will have been asset stripped in advance.
If you are working for them I would ensure you avoid them owing you much pay.
Was this worth the disruption experiment?
Good to see the private sector teaching the NHS about efficiency again.
LFMAO
Oh well. Primary care has caught up and offers sensible balance of appointments now which is what patients want. A tricky remote service of course won’t work in the real world with patients who have physical, examinable problems and multi morbid age related pathology….it’s medicine stupid.