By Gavin Gibbon
Faisal Bin Juma Belhoul had asked creditors for 'patience' and 'prudence' before administrators were appointed for troubled hospital operator
Former executive chairman of NMC Health, Faisal Bin Juma Belhoul, believes he could have found a better deal for shareholders of the embattled UAE-based healthcare provider.
Belhoul, a managing partner of Ithmar Capital, took on the role at the end of March after the Dubai-based private equity firm acquired a nine percent stake in the hospital operator.
With the company in freefall, he called for “patience” and “prudence” from shareholders, but just over a week after his appointment, NMC had bowed to creditor demands to be placed into administration from one of its largest creditors Abu Dhabi Commercial Bank – which carried exposure of around $981 million.
Just days later, Belhoul was gone as administrators Alvarez & Marsal Europe, announced “extensive restructuring” of the troubled health giant.
However, he told Arabian Business: “The situation was, the banks wanted a quick solution via administration. We, on behalf of the shareholder group, were working towards more of an equitable solution, but unfortunately by the time I joined the company, the timeline was too late and the banks had already made up their minds to proceed in that direction.
“I believe, with the right amount of time, there could have been a better solution for all stakeholders.”
The trouble began for NMC Health and its Indian billionaire owner BR Shetty, as far back as December last year, when it was targeted by short seller Carson Block’s Muddy Waters in a report which alleged overpayment for assets, inflated cash balances and understated debt.
Trading in the shares of NMC Health was suspended at the end of February as the company moved to provide clarity regarding its financial position, which was later revealed to be substantially above the previously reported $5 billion debt and estimated to be around $6.6bn.
Still, Belhoul revealed he saw the move to executive chairman as an opportunity, albeit he admitted he wasn’t aware of the scale of the challenge faced.
“We saw it as a company with a lot of challenges and troubles and we felt that we could play a positive role and help the company basically navigate through the issues.
“The issues with NMC initially were more governance related, but then it expanded to go beyond governance and it was linked more to potential fraud and other allegations. It became a much more complex situation,” he said.
“Obviously you are not privy to all the information until you step in and when I stepped in it was already a bad situation. Information was coming out on a piecemeal basis. We knew it was a big challenge. We did not go blinded into the situation, we had full awareness of the risk, but it was a challenge as well and we believed it was a company that would continue to play a role in the market,” he added.
Following administration in April, NMC was subsequently been removed from the London Stock Exchange where it once held the prestigious status of being included in the FTSE 100.
Overall, banks in the UAE disclosed more than $2 billion of exposure, while Citigroup analysts estimated that the impact on the five UAE banks it covers would total about 23 percent of 2020 profit – figures devised pre-Covid-19.
Belhoul said it was always the intention to save the workforce, particularly as the country, and the world, was in the middle of battling the global Covid-19 pandemic.
He added: “Under the Covid situation, the last thing we wanted to see is handicapping your capacity and handicapping your ability to fight this pandemic in the most effective way. It was more of an emotional type of motivation that we were willing to save the company, besides whatever has happened in the past, the idea was that this company has to continue.”