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Tue 3 Mar 2020 07:29 PM

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NMC Health founder said to mull sale of Abu Dhabi pharma firm

Sources say BR Shetty is considering selling his Neopharma business after drawing interest from potential investors

NMC Health founder said to mull sale of Abu Dhabi pharma firm

NMC Health founder Bavaguthu Raghuram Shetty.

NMC Health founder Bavaguthu Raghuram Shetty is considering selling his Abu Dhabi-based pharmaceuticals business, Neopharma, after drawing interest from potential investors, according to people with knowledge of the matter.

Shetty, who resigned as chairman of the troubled hospital operator last month, has been approached by parties, including regional investors and family offices, the people said, asking not to be identified because the matter is private. Neopharma could be valued at between $700 million and $1 billion, they said.

The Indian entrepreneur, who left over concerns that he may have misreported the size of his stake in NMC, may sell all or part of Neopharma and use the proceeds to repay loans, the people said. Talks are in preliminary stages and Shetty may decide not to proceed, they said. Neopharma operates in about 50 countries in the Middle East, Africa and Asia.

A spokesman for Shetty’s BRS Ventures, which holds 30 companies including NMC and financial services firm Finablr, declined to comment.

Shetty is working with Houlihan Lokey to explore strategic options for BRS Ventures after NMC became entangled in allegations of fraud.

Shetty had been considering selling shares in Neopharma before a December report by short seller Carson Block alleged NMC had overpaid for assets, inflated cash balances and understated debt.

Since then, the hospital operator has lost two-thirds of its value and five of 11 board members have either been fired or resigned amid a series of financial improprieties.

On Monday, NMC asked lenders for a reprieve on its debt and Moody’s Investors Service slashed its rating by five levels, saying its financial statements can’t be relied on.

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