EHE – Estia Health | Aussie Stock Forums

The firm, listed on the Australian Securities Exchange by its private equity owners nearly two years ago, is understood to be one of several providers in line for targeted Department of Health *audits.

The news hit Estia shares, which fell more than five per cent in early trade today. Shares in the company lost 28c to $5.

That move comes after years of rapid expansion, and with the federal government clamping down on non-compliant funding claims, after a sharp increase in the level of funding aged-care providers are receiving.

Estia has also attracted the attention of short-selling hedge funds, all questioning the sustainability of its aggressive roll-up acquisition strategy.

With a market capitalisation of $993m, Estia is headed by former Bupa executive Paul Gregersen.

Concerns have also been raised about the company’s practice of reclassifying residents of newly purchased facilities into higher care categories, which attracts extra government funding.