Ramsay launches $1.4bn capital raising

Ramsay Health Care will try and raise $1.4 billion to boost its balance sheet after elective surgery stopped in many countries due to the coronavirus pandemic.

Ramsay on Wednesday said it aims to raise $1.2 billion through an underwritten institutional placement and $200 million through a share purchase plan.

About 21.4 million new shares will be issued, priced at $56 each. This is a 12.9 per cent discount on the last trading price of $64.29 from Tuesday.

Shares in the private hospital operator were put in a trading halt on Wednesday before the announcement.

The healthcare provider reported in February it had made $273.6 million in first-half core profit, a 3.4 per cent increase from last year but below consensus analysts expectations of a $285 million profit.

The Sydney-based company has 77,000 staff and treats more than 8.5 million patients in 480 health care facilities across 11 countries.

Its WA operations include Attadale Rehabilitation Hospital, Glengarry Private Hospital, Hollywood Private Hospital, Joondalup Health Campus, Joondalup Private Hospital and Hollywood Health Clinic.

Managing director Craig McNally said the equity raising would increase the firm’s financial flexibility.

Ramsay has suspended ordinary share dividend payments.

The business has made its hospitals available to treat coronavirus patients.

In Australia, some elective surgery is due to resume from Monday.

A number of companies listed on the share market have tried raising capital to boost liquidity during the coronavirus pandemic.

Cochlear, QBE, Webjet, Flight Centre, Oil Search, Reece, Kathmandu and oOh!media have tried similar moves in recent weeks.

AAP