NIB Shares Lost 8% Today: Here’s Why

  • NIB shares returned from a trading halt before sinking into the red.
  • The health insurer raised $135M from institutional market players.
  • It will use the money to fund its growth into the NDIS marketplace.

NIB Holdings saw its share price return from a trading halt before sinking into the red. Thursday’s morning trade saw the health insurer’s stock losing more than 8% to $6.88.

Why Is NIB Share Plummeting?

The NIB share price weakness on Thursday emerged as the company completed a $135M institutional placement. The release showed NIB raised the month at $6.9 per new share, following a bookbuild procedure.

That translated to 8.1% NIB share price discounts before the halt. Also, this represented the underwritten placement’s floor price. That could indicate a faded demand for that offering. NIB will now concentrate on the non-underwritten stock purchase strategy, aiming to raise another $15 million. It will fundraise the amount at the institutional placement price low.

Why the Fundraising

The firm will use the equity raising proceeds to back its move into Australia’s NDIS (National Disability Insurance Scheme) space. NIB will enter the spectrum as a Plan Manager. Moreover, NIB has pointed at several likely acquisitions and inked a contract for one. It will begin with the Maple Plan acquisition.

Maple Plan is the 7th largest Plan Manager, boasting revenue of about $10.4 million and 7,000 participants in the financial year 2022. Mark Fitzgibbon of NIB stated that the NDIS represents a crucial economic sector and Australia’s social capital.

The platform boasts 530K participants and expects over 800K come 2030. Also, projections suggested NDIS funding will double from 2022’s $29 billion to $59 billion come 2030. He added that they could partake in the NDIS success and enhance participant outcomes.

Why NIB Share Halted

The company halted the NIB stock price yesterday to ensure equity fundraising for its new acquisition. The release stated that NIB aims to raise $150 million through underwritten $135M institutional placement and a $15M non-underwritten SPP (share purchase plan).

Moreover, the company confirmed potential acquisitions. Such developments might help NIB attain its objective of controlling 50K participants come 2025.

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