Abu Dhabi's biggest healthcare company is heading for administration as the company revealed it had been unable to secure a standstill agreement on its debt from lenders.
An application had been made to appoint administrators by the company's biggest creditor, Abu Dhabi Commercial Bank, last week, with a hearing date set for the UK High Court tomorrow. The company had requested more time to restructure its debts, but said on Wednesday evening that "notwithstanding strenuous efforts to address creditors' concerns, it has not been able to secure their alignment and support".
The company "has been advised by its counsel that it is not in a position to oppose the application successfully" it said in a statement to the London Stock Exchange. "Accordingly, it expects the company to be placed into administration in due course."
NMC Health has made a series of damaging disclosures in the past few months after a report by activist investor Muddy Waters in December alleged it inflated cash balances, overpaid for assets and understated its debt.
Last month, the company said its debt stood at $6.6 billion (Dh24bn), substantially higher than the $2.1bn declared in its last filed accounts. A review committee also discovered evidence of "suspected fraudulent behaviour".
Following the disclosures, two joint non-executive chairmen, including the group’s founder, BR Shetty, an executive vice-chairman, a chief executive, chief financial officer and a member of the company’s treasury department all departed from the firm.
Faisal Belhoul, who became executive chairman of the healthcare group on March 26 after his Dubai-based private equity firm, Ithmar Capital, secured a 9 per cent stake, had been attempting to secure a standstill agreement with lenders, promising improved governance and transparency.
However, his bid to save the firm appears to have come too late.
NMC Health owes money to more than 80 local, regional and international lenders, according to a disclosure from ADCB, which is owed $981m.
Mr Belhoul had argued administration would cause instability to NMC’s operations, which, “in the midst of the Covid-19 crisis, would potentially put lives at risk”, he said in a statement on Saturday.
He had requested more time from lenders to embark on a turnaround.
"Since obtaining an accurate picture of NMC's situation requires input from third parties and extensive forensic accounting, we appreciate the patience of creditors as we work as quickly as possible to gather and analyse this information," he told The National.
NMC Health was founded by Mr Shetty as New Medical Centre in Abu Dhabi in 1975. The company had grown to become a major enterprise, treating more than 8.5 million patients annually through its chain of hospitals, clinics and pharmacies. The business, which has operations in 18 countries, employs more than 2,000 doctors, 20,000 other staff members and has more than 2,200 hospital beds.
In a statement on Saturday announcing it had applied for administrators to be appointed, ADCB said it was taking action "to safeguard the future of NMC Health and its subsidiaries".
The lender said that given the reported irregularities at the company and the fact it had defaulted on debts, it had "demanded that NMC Health Group's board of directors undertake remedial action", including improvements in transparency and corporate governance.
"However, NMC Health Group failed to respond adequately to these reasonable requests from ADCB," the statement said.
ADCB said it expects joint administrators to "launch a full, transparent and independent investigation" into the company's affairs and the misrepresentation of its finances.
It also thanked the company's staff and said it "appreciates the essential role that the NMC Health Group plays in our communities, particularly during the current challenging circumstances".
Global state-owned investor ranking by size
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Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
MATCH INFO
Champions League quarter-final, first leg
Ajax v Juventus, Wednesday, 11pm (UAE)
Match on BeIN Sports
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Iran has sent five planeloads of food to Qatar, which is suffering shortages amid a regional blockade.
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The land border with Saudi Arabia, through which 40% of Qatar's food comes, has been closed.
Meanwhile, mediators Kuwait said that Qatar was ready to listen to the "qualms" of its neighbours.
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Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
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The Indoor Cricket World Cup
When: September 16-23
Where: Insportz, Dubai
Indoor cricket World Cup:
Insportz, Dubai, September 16-23
UAE fixtures:
Men
Saturday, September 16 – 1.45pm, v New Zealand
Sunday, September 17 – 10.30am, v Australia; 3.45pm, v South Africa
Monday, September 18 – 2pm, v England; 7.15pm, v India
Tuesday, September 19 – 12.15pm, v Singapore; 5.30pm, v Sri Lanka
Thursday, September 21 – 2pm v Malaysia
Friday, September 22 – 3.30pm, semi-final
Saturday, September 23 – 3pm, grand final
Women
Saturday, September 16 – 5.15pm, v Australia
Sunday, September 17 – 2pm, v South Africa; 7.15pm, v New Zealand
Monday, September 18 – 5.30pm, v England
Tuesday, September 19 – 10.30am, v New Zealand; 3.45pm, v South Africa
Thursday, September 21 – 12.15pm, v Australia
Friday, September 22 – 1.30pm, semi-final
Saturday, September 23 – 1pm, grand final
The five pillars of Islam
