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.
Business News Australia
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