Creditors of the troubled UAE-based healthcare major NMC are set to vote on a plan that could help 34 subsidiaries exit administration.
Under the deeds of company arrangement proposals, which NMC said has the support of its creditors, the unsecured debt of some of the firms will be exchanged for equity-like interests in a new group.
The company said in a statement that while shares of the companies and “substantially all” the assets will be transferred to the new group, NMC Healthcare LTD will remain in administration “to pursue potential litigation claims” against itself and other firms.
Creditors are scheduled to vote on the proposed plan on September 1 and the transfer of assets and shares is expected to take between three and five months, the statement said.
NMC, which was once listed on the London Stock Exchange, collapsed in 2019, revealing that it had more than $4 billion of undisclosed borrowings. In April, NMC completed the sale of Eugin Group, its lucrative fertility business, to German health-care company Fresenius for $525 million.
Michael Davis, CEO, said: “The first half of 2021 is like daylight compared to the dark nights of the first half of 2020. We have brought the company back from the brink of near total collapse to secure NMC’s future and to ensure that our ability to provide world-class patient care is preserved – through thick and thin.
“Over the past 18 months we worked with our stakeholders and partners to stabilise the group’s financial position and improved operations, saving over $2bn of value in the process. But more importantly, I’m tremendously proud of the contribution that our 12,000 clinicians and support staff make to their communities across the UAE every day. As we return to normalised capacity levels, I am excited to explore the true potential of NMC Healthcare across our multi-specialty portfolio.”
Richard Fleming, managing director of Alvarez & Marsal Europe and joint administrator of NMC PLC and NMC Healthcare said: “We have worked closely with NMC Healthcare’s stakeholders on a long-term approach that will deliver maximum returns to creditors while ensuring NMC’s survival as value-generating going concern.
“The deeds of company arrangement (DOCA) provide the best and most appropriate mechanism to both secure NMC’s position to delivery first-class patient care, while enabling the group to continue its restructuring and performance improvement program.”
The announcement came as NMC Healthcare Ltd, the largest private healthcare company in the UAE, reported its financial and operating results for the half year ending June 30.
Despite the impact of a second wave of Covid-19 in February and Ramadan in April and May, gross revenues for the NMC’s UAE and Oman business of $611 million are 10 percent ahead of the business plan.
The number of patient encounters across the group has grown significantly to 4.4 million year-to-date while the group administered 98,919 vaccinations and 1.7 million PCR tests in H1.
Founded by Indian entrepreneur Bavaguthu Raghuram Shetty (pictured above), NMC had a market value of $10 billion at its peak on the London Stock Exchange before allegations of fraud pushed it into administration.
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