European credit investment firm AlbaCore Capital Group (AlbaCore), is making a sustainability-linked investment of up to USD200 million in Babylon Holdings Limited (Babylon), one of the world’s fastest-growing digital healthcare companies.
The interest rate on the notes is tied to the delivery of affordable healthcare to under-served populations.
The proceeds will provide Babylon with additional capital ranging from USD100 million to USD200 million of debt, with the investment level to be determined at Babylon’s option upon closing of the merger with Alkuri Global Acquisition Corp. (Alkuri), a publicly traded special purpose acquisition company. The merger is expected to close on or about 21 October 2021.
Together with already committed PIPE capital of USD230 million from institutional and strategic investors, Babylon will now have access to as much as USD775 million of capital following the merger with Alkuri, assuming no redemptions, with up to USD430 million of capital guaranteed to continue fuelling Babylon’s sustained growth.
Bill Ammons, Founding Partner and Portfolio Manager at AlbaCore Capital Group, says: “We are excited to be announcing this new partnership with Babylon to support its growth plans towards making healthcare accessible and affordable to everyone. This investment is an example of how strategic capital providers can have a real and positive social impact. Since day one we have integrated a responsible investment risk lens into our investing at a firm-wide level and see it to be essential for successful investing.”
David Allen, Managing Partner and Chief Investment Officer at AlbaCore Capital Group, adds: “As creators of innovative solutions, Babylon and AlbaCore are great partners. We recognise their proven ability to grow rapidly and deliver leading technology-based healthcare, forming the basis for our investment.”
Charlie Steel, Babylon’s Chief Financial Officer, says: “I am delighted that AlbaCore, with its steadfast focus on Environmental, Social and Governance (ESG) engagement, is investing in Babylon. ESG is central to Babylon’s mission which is to make quality healthcare accessible and affordable for every person on Earth. Whether we are delivering world class health care to the under-served populations of rural America and Rwanda, or committing to Tech Zero to reduce carbon emissions, as a team we are constantly challenging ourselves to do more and better. AlbaCore’s commitment to ESG makes it a perfect match for Babylon and I’m delighted to welcome them as an investor.”
The investment is in the form of five-year unsecured notes with 0.5 per cent penny warrants capped at USD15/share. The interest rate payable by Babylon on the notes initiates at 8 per cent and increases to 12 per cent over the five-year period (up to 50 per cent PIK at Babylon’s election), with a potential, small rate adjustment tied to the delivery of affordable healthcare to underserved populations.
