Healthcare firm Totally weighs sale as it faces eight-figure medical negligence claim
Totally is exploring a sale of one or more of its subsidiaries to shore up its balance sheet after the firm revealed it faces an eight-figure medical negligence claim.
The Derby-based business is to undertake a “strategic review” under which it will consider “selling one or more of the company’s subsidiaries”, “receiving strategic investment or undertaking some other form of comparable corporate action”.
Shares in Totally crashed 60 per cent during early trading on Thursday.
The struggling healthcare business, which lost its NHS 111 support contract earlier this year, also said it had received fresh correspondence regarding a medical negligence claim “relating to an incident that occurred in January 2018”.
The company said it initially believed the claim could be funded by its insurance policy, which is capped at £10m.
But it now fears “there is a stronger probability” that the size of the liability may be more than the claim limit on the insurance policy.
In a further blow to the company, chief financial officer Laurence Goldberg announced he would be stepping down with immediate effect.
The firm said it had recruited an unnamed external adviser to lead its finance team in the interim.
Totally also said it had taken a hit from being unable to redeploy resources from its lost NHS 111 contract, which had been worth £13m, and that it had won new contracts at a slower rate than expected.
But the firm insisted that “the outlook for the underlying operations are positive”, adding that it was profitable on a monthly basis.
The healthcare business opted to withdraw its shareholder guidance, pending the outcome of the strategic review.
Totally shares have nearly halved in value since the start of the year.
“Operationally, the business…continues to perform strongly with customer satisfaction remaining high,” the firm said.
“Nevertheless, the directors recognise that the group needs to strengthen its balance sheet over the coming months so the company has commenced a strategic review intended to raise further funding to support and rightsize its business and to protect the interests of all stakeholders.”