Bright Health Group, a healthcare company, entered into a credit facility with an investment partnership of New Enterprise Associates (NEA) with $60 million of credit capacity on Aug. 4, 2023. Bright Health is also announcing that it has entered into a permanent waiver of default on its existing credit facility, which expires in February 2024.
“We are excited to have the continued support of NEA, and all of our partners, as we continue to transform our business into one of the leading value-driven healthcare companies,” Mike Mikan, president and CEO of Bright Health, said.
The financing is expected to support the working capital needs of the company pending the closing of the California Medicare Advantage Business sale to Molina Healthcare.
In connection with the new credit facility, Bright Health will issue penny warrants to purchase up to 1,656,789 shares of the company’s common stock to the lenders under such new credit facility. The warrant issuance would typically require approval of shareholders, however Bright Health’s audit committee of the board of directors determined that delaying the debt financing transaction (which includes the issuance of warrants) until shareholder approval would jeopardize the financial viability of the company. Therefore, the audit committee approved the company’s omission to receive shareholder approval. Bright Health expects to formally notify stockholders as soon as practicable after the date hereof that it intends to issue penny warrants in connection with the funding of loans under the new credit facility without seeking their approval. The New York Stock Exchange has approved the company’s reliance on the exception provided under Section 312.05 of the NYSE’s listed company manual.
Moelis & Company is serving as Bright Health’s financial advisor and Simpson Thacher & Bartlett is serving as Bright Health’s legal advisor in connection with this process.
