Healius Ltd (ASX: HLS) shares were missing from action on the ASX on Monday.
That's because the healthcare company requested a trading halt prior to the market open.
But why were Healius shares suspended from trade? Let's find out.
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Why weren't Healius shares trading on the ASX on Monday?
According to the trading halt request, Healius required the halt so it could undertake a capital raising.
It has since released details of the capital raising, revealing that it is seeking $187 million from a fully underwritten accelerated non-renounceable entitlement offer.
The company is raising the funds at $1.20 per new share, which represents a whopping 34.6% discount to where Healius shares last traded on the ASX. This significant discount appears to be a sign that demand for its shares isn't overly strong right now.
Healius revealed that the proceeds from the entitlement offer will be used to reduce its net debt and reset its balance sheet with appropriate gearing.
Gearing update
In addition, the company revealed that its lending syndicate has agreed to waive Healius' gearing covenant for first half of 2024 and temporarily increased the covenant from 3.5 times to 4 times at 30 June 2024.
This waiver is in conjunction with a commitment from Healius to reduce its total bank facilities from $1 billion to $750 million and to reduce its drawn debt by at least $150 million by 30 June 2024.
Following the completion of the entitlement offer, Healius expects to have sufficient financial flexibility and liquidity.
However, this will come at a cost to shareholders in more than one way. As well as dilution from the capital raising, the company revealed that it will not declare or pay any dividends for FY 2024.
Trading update
Healius has had a tough start to the year and has provided guidance that reflects this.
It expects to report underlying EBITDA of $158 million to $161 million and EBIT of $14 million to $17 million for the first half. This compares to EBITDA and EBIT of $176.8 million and $40 million, respectively, during the prior corresponding period.
For FY 2024, underlying EBITDA of $383 million to $393 million and EBIT of $95 million to $105 million is expected by the company. The latter compares to EBIT of $99 million in FY 2023.
