Dive Brief:
- Cano Health received a notice from the New York Stock Exchange warning the struggling primary care chain it could be delisted for failing to comply with market capitalization rules.
- The company’s total market capitalization, or the market value of its outstanding shares, has been less than $50 million over a 30 trading-day period and its stockholders’ equity is less than $50 million, according to a press release from the provider last week.
- To regain compliance, Cano is now targeting $290 million in cost reductions by the end of this year, including $65 million it previously disclosed. The chain has been shutting down operations in some markets and looking for a buyer as part of its financial turnaround plan.
Dive Insight:
Cano will now have to submit a plan on how it will regain compliance with the stock exchange’s rules within 18 months, according to the press release. If the NYSE doesn’t accept the proposal, the company could be suspended from trading and delisted.
The provider said it will accelerate its turnaround plan, which includes improving its medical cost ratio, cutting operational expenses, consolidating and selling assets, and focusing on its Medicare Advantage and ACO REACH businesses.
The latest notice comes months after Cano completed a reverse share split to boost its share price and regain compliance with another NYSE listing rule. In September, the chain received notice from the NYSE that it could be delisted after the average closing price of the company’s stock had traded at less than $1.00 per share for 30 consecutive days.
The primary care provider has been looking for a buyer and paring back its operational footprint for several months, after Cano warned in the summer that it might not have enough cash to fund its business over the next year.
The company sold its health centers in Texas and Nevada to Humana’s CenterWell Senior Primary Care business for almost $67 million this fall.
In the third quarter, Cano posted a $491.7 million net loss, driven by an impairment charge and higher third-party medical costs. It cut 21% of its workforce during the period as it shut down clinics in California, New Mexico and Illinois. The company also plans to exit Puerto Rico early this year.
