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Wed 8 Jan 2020 12:39 PM

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Billionaire BR Shetty's NMC plans review after short seller attack

NMC Health said the sale of the shares by the investors was unrelated to the company's operating performance its its long-term prospects

Billionaire BR Shetty's NMC plans review after short seller attack

Investors Saeed Mohamed Butti Mohamed Khalfan Al Qebaisi and Khaleefa Butti Omair Yousif Ahmed Al Muhairi both sold about 15% of NMC for about 1,200 pence a share.

NMC Health Plc shares plunged after two major investors sold $493 million worth of shares well below the market price to reduce their holdings in the troubled healthcare group.

The stock fell as much as 19% to 1,206 pence in early London trading. Investors Saeed Mohamed Butti Mohamed Khalfan Al Qebaisi and Khaleefa Butti Omair Yousif Ahmed Al Muhairi both sold about 15% of NMC for about 1,200 pence a share.

The company had a rocky end to 2019 as shares slumped following allegations by Carson Block’s Muddy Waters Capital LLC. The short-selling firm said the company’s financial statements hint at potential overpayment for assets, inflated cash balances and understated debt.

NMC, which is based in the United Arab Emirates, has said that those claims are unfounded and that it would conduct an independent review.

The two investors will retain a combined stake of about 17% in the company and agreed to place their remaining shares in a temporary lock-up. Proceeds from the sale will be used to pay down debt.

Update:

In a statement, NMC Health said the sale of the shares by the investors was unrelated to the company's operating performance or its long-term prospects.

"NMC recognises that the motivation for the transaction, as made clear in the launch statement of 7 January 2020, pertains only to the means of financing the investors' shareholdings and not to the company's operating performance nor long-term prospects," it said. 

"H.E. Mr Saeed Mohamed Butti Mohamed Khalfan Al Qebaisi and Mr Khalifa Bin Butti remain supportive and long-term investors in NMC."

(Additional reporting)