Cochlear announces $800 million capital raise to ride out market uncertainty

Cochlear announces $800 million capital raise to ride out market uncertainty

Australian hearing implants business Cochlear (ASX: COH) hopes to raise $800 million to ensure it remains strongly capitalised during the economic fallout of Covid-19.

Many elective surgeries, including Cochlear's own implant surgeries, have been deferred as hospitals around the world ramp up treatment efforts for the novel coronavirus.

This has caused "significant business disruption" for Cochlear and the company hopes an $800 million injection of capital will ensure the group can bounce back once elective surgeries resume.

The company says it anticipates losses from these deferred surgeries will be recovered upon recommencement.

Cochlear will use the $800 million to fortify its balance sheet enabling the company to navigate market uncertainties while continuing to reinvest and reinforce its position as the global leader in hearing implant solutions.

Its plea to potential investors reiterates the business case that has seen Cochlear become one of Australia's leading med-tech companies.

As the global leader in heating implant solutions Cochlear holds an estimated 60 per cent market share in implantable hearing solutions with more than 600,000 implants sold in the last 40 years.

The placement will be conducted at $140 per new share, which represents a 16.7 per cent discount to the last closing price of $168 per share on Tuesday 24 March.

Approximately 5.7 million new shares will be issued as part of the raise, representing 9.9 per cent of the company's existing issued capital.

"To ensure we emerge from this global health pandemic in an even stronger competitive position than before, we are strengthening the balance sheet by raising equity," says Cochlear chairman Rick Holliday-Smith.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

How communications technology can raise the bar on customer service, employee experience
Partner Content
From capturing feedback early to providing messages with a higher rate of cut-through, ...
Advertisement

Related Stories

Brisbane Broncos player Ryan James and Gold Coast’s BSKT launch new native food range

Brisbane Broncos player Ryan James and Gold Coast’s BSKT launch new native food range

Indigenous entrepreneur and Brisbane Broncos prop Ryan James will d...

Lewis Land steps up plans for $1.5b Harbour Shores amid Gold Coast housing crunch

Lewis Land steps up plans for $1.5b Harbour Shores amid Gold Coast housing crunch

Sovereign Islands developer Lewis Land Group has stepped up the pac...

FDA clears path for Bubs baby formula expansion in the US

FDA clears path for Bubs baby formula expansion in the US

An emergency policy in the United States to allow fast-tracked impo...

Steve McCann steps down as Crown Resorts CEO, replaced by Wynn Macau executive

Steve McCann steps down as Crown Resorts CEO, replaced by Wynn Macau executive

Following the $8.9 billion takeover of Crown Resorts by US investme...