Annual report pursuant to Section 13 and 15(d)

Assets Held for Sale

Assets Held for Sale
12 Months Ended
Dec. 31, 2022
Discontinued Operations and Disposal Groups [Abstract]  
Assets Held for Sale
5.    Assets Held for Sale
2022 Disposal groups held for sale
During the fourth quarter of 2022, the Group identified two disposal groups that meet the requirements of ASC 360-10 and were classified as held for sale in its Consolidated Balance Sheets. This current period classification resulted in the Group identifying a triggering event as it was more likely than not that these asset groups would be disposed of under ASC 350-20. For more details over the resulting impairment tests performed prior to measuring the disposal groups at the lower of their carrying amount or fair value less cost to sell, see Note 10.

In October 2022, the Group announced its plan to sell the IPA Business, a reporting unit previously within the Healthcare services segment. Management made certain judgements when assessing if this sale qualified for the presentation and disclosure requirements of a discontinued operation as defined under ASC 205, Presentation of Financial Statements, and concluded that the sale is not a strategic shift and therefore is not considered a discontinued operation. The Group intends to sell the IPA Business within the second quarter of 2023. Accordingly, the assets and liabilities of the IPA Business are classified within the current section of the Consolidated Balance Sheet as of December 31, 2022 only. Further, the following presents the major classes of assets and liabilities for the IPA Business reporting unit held for sale as of December 31, 2022:
As of December 31, 2022
Cash and cash equivalents 60,745 
Prepayments and contract assets 396 
Right of use assets - Non-current 1,319 
Trade and other receivables 9,529 
Property, plant and equipment 221 
Goodwill 32,444 
Other intangible assets 14,960 
Assets held for sale 119,614 
Trade and other payables 8,493 
Accruals and other liabilities 3,479 
Claims payable 41,650 
Lease liabilities - Non-current 1,374 
Premium Deficiency Reserve - Current 14,736 
Liabilities held for sale 69,732 

The IPA Business had the following pre-tax losses for each year ended December 31:

IPA Business Net loss from operations before income taxes 000's
2022 41,192
2021 76,682

In addition to the IPA Business reporting unit, the Group separately determined that the Higi reporting unit met the criteria for being classified as held for sale as of December 31, 2022. The Group intends to sell Higi within one year from December 31, 2022. Accordingly, the assets and liabilities of Higi are classified within the current section of the Consolidated Balance Sheet as of December 31, 2022 only. In addition to the impairment charges recognized as a result of the Group’s interim and year end impairment tests described in Note 10, an additional impairment charge of 14.3 million was recognized for long-lived assets impairment under ASC 360-10, as a result of its held for sale classification and estimated and accrued cost to sell the Higi reporting unit.
As of December 31, 2022
Cash and cash equivalents 255 
Trade and other receivables 2,823 
Prepayments and contract assets 1,819 
Right of use assets - Non-current 1,514 
Property, plant and equipment 8,516 
Other intangible assets 5,082 
Valuation allowance for Higi's impaired assets held for sale (14,348)
Assets held for sale 5,661 
Trade and other payables 220 
Accruals and other liabilities 2,485 
Contract Liabilities - current 731 
Lease liabilities - Non-current 1,549 
Liabilities held for sale 4,985 

2021 Disposals
On January 14, 2021, the Group entered into a Share Purchase Agreement (“SPA”) with TELUS Corporation (“TELUS”), a Canadian publicly traded holding company which is the parent of various telecommunication subsidiaries, for the sale of the Babylon Health Canada Limited business. The entire issued share capital of Babylon Health Canada Limited was transferred to TELUS for a base price of $1.8 million in Canadian dollars (“CAD”), which has been adjusted for working capital and net indebtedness. An additional $3.5 million CAD payment was made by TELUS that was attributable to a partial repayment of an Intercompany Loan due from Babylon Canada to Babylon Partners Limited. The remaining amount of the Intercompany loan was forgiven immediately prior to the execution of the SPA.

Effect of disposal:
For the Year Ended December 31, 2021
Cash and cash equivalents (57)
Prepayments and contract assets (1,322)
Property, plant and equipment (922)
Right-of-use assets (797)
Trade and other receivables (619)
Accruals and other liabilities 658 
Lease liabilities 837 
Borrowings 3,075 
Trade and other payables 588 
Net assets and liabilities derecognized
Consideration received
Working capital adjustment 132 
Gain on disposal