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Tue 10 Mar 2020 12:39 PM

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Abu Dhabi insurer steps in to help NMC Health pay salaries

Daman is said to be speeding up payments to Abu Dhabi-based NMC so it can pay salaries and other invoices

Abu Dhabi insurer steps in to help NMC Health pay salaries

Banks have been reluctant to lend to London-listed NMC since Muddy Waters Capital LLC accused it of financial improprieties in December. 

An Abu Dhabi-owned insurer is helping NMC Health Plc pay overdue bills, according to people familiar with the matter, in what could be a sign the emirate is stepping in to help the embattled hospital operator.

The National Health Insurance Co, known as Daman, is speeding up payments to Abu Dhabi-based NMC so it can pay salaries and other invoices, the people said.

The move by Daman, which is 80%-owned by Abu Dhabi’s government and the rest by Munich Re, is seen as an intervention by the oil-rich emirate to address a cash shortfall. It also shows the extent of troubles at NMC, which was once a darling of London stock markets and an example of a Middle Eastern success story.

Banks have been reluctant to lend to London-listed NMC since Muddy Waters Capital LLC accused it of financial improprieties in December. The company earlier this month asked lenders for an informal standstill on its existing facilities.

“Daman’s relationship with its partners is governed by regulatory guidelines and agreements that stipulate how and when payments are made,” according to a company statement. “Daman complies with all standards and agreements.”

Shares of NMC, founded by Indian billionaire Bavaguthu Raghuram Shetty, have been in freefall since the Muddy Waters report. The stock was suspended on Feb. 27 and will be relegated to the mid-cap FTSE 250 Index when trading resumes.

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