Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

Subsequent Events
3 Months Ended
Mar. 31, 2023
Subsequent Events [Abstract]  
Subsequent Events
19.    Subsequent Events

On April 17, 2023, Babylon and AlbaCore agreed to a waiver of the conditions for the utilization of tranche three of the Bridge Facility (the “Tranche Three Waiver”). In connection with the Tranche Three Waiver, among other things, (i) certain operational milestones under the Bridge Facility Agreement were extended, (ii) the governance regime agreed under the Bridge Facility Agreement was simplified to provide a right for the Bridge Noteholders to nominate a candidate for appointment by the Company as an independent, non-executive director to the board of directors of the Company and that, following such appointment, the board of directors of the Company shall at all times comprise a maximum of five directors, a majority of which must be independent non-executive directors and two of which must be nominated by the Bridge Noteholders and (iii) the Company agreed to provide the Bridge Noteholders with additional information in relation to the Group to facilitate their financial, operational and legal due diligence of the Group.

On May 10, 2023, the Company amended the Bridge Facility and entered into the Additional Bridge Facility with AlbaCore for an additional amount up to $34.5 million on terms substantially similar to the original Bridge Facility. At the same time, the Group and AlbaCore entered into a framework implementation agreement (the “Framework Agreement”) to facilitate, upon the Trigger Event, a restructuring and recapitalization of the Group. Upon satisfaction of the applicable terms and conditions, the Additional Bridge Facility will be made available to the Company in three additional tranches.
The proceeds from the Additional Bridge Facility are expected to support the Company’s on-going operations and facilitate any necessary preparatory work to ensure that the Take Private Proposal (as defined below) can be ready for implementation between June 16, 2023 and June 30, 2023, in the absence of other acceptable transaction proposals from third parties in the interim period.

The Framework Agreement contemplates that, upon the Trigger Event, core direct and indirect subsidiaries of the Company (the “Go-Forward Business”) will return to private ownership (the “Take Private Proposal”) and provides, subject to specified terms and conditions and definitive documentation, a structure for the following to be implemented: (i) additional funding for the Go-Forward Business; (ii) an amendment of the existing debt under the under the Existing Notes, the Bridge Facility and the Additional Bridge Facility (collectively, the “Debt”), including an extension of the maturity of the Debt; and (iii) a new long-term employee incentive plan.

The Framework Agreement contemplates the implementation of the Take Private Proposal through the appointment of administrators by the English courts to the Company (but not to any other member of the Group) and a series of steps to be described in a steps plan, pursuant to which the Take Private Proposal will involve (i) the transfer of assets and investments in subsidiaries from the Company to Babylon Group Holdings Limited, (ii) a request by the board of directors of the Company to the High Court in London for the appointment of administrators to the Company; (iii) those administrators’ sale of Babylon Group Holdings Limited and certain other assets of the Company (together representing substantially all of the business of the Group) to an entity formed by the Investor Group (the “NewCo”); and (iv) the subsequent dissolution of the Company and any subsidiaries in the Group that are not transferred to the NewCo. This transaction would be implemented without the approval of Babylon’s shareholders because AlbaCore will be exercising rights under its debt agreements with Babylon, and the Take Private Proposal will be implemented through the appointment of administrators by the English courts to Babylon Holdings Limited. It is not expected that the Take Private Proposal would involve any financial consideration being provided to Babylon’s Class A ordinary shareholders and holders of equity instruments exercisable for the Class A ordinary shares.

The Bridge Notes and the Additional Bridge Notes shall be repayable on demand after five days’ notice from the Note Trustee following the Trigger Event. Upon the Trigger Event, the Existing Notes could also become due as a result of the cross-default provision. Such a demand for repayment would have a material adverse effect on our liquidity, our business and results of operations.
While there is no assurance that the Additional Bridge Facility and the Framework Agreement will be implemented in a manner that will provide us with the funding that we need, management believes it remains appropriate to prepare our financial statements on a going concern basis.