NMC Health sells 53% stake in its Saudi joint venture

Saudi Medical Care Group is the last international business to be sold by the UAE-based hospital operator as it seeks to come out of administration

FILE PHOTO: General view of an NMC specialty hospital in Abu Dhabi, United Arab Emirates, February 11, 2020. REUTERS/Satish Kumar/File Photo
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UAE-based hospital operator NMC Health said on Monday it sold 53 per cent of its stake in Saudi Medical Care Group (SMCG), marking its final international asset sale as the company prepares to complete its administration process.

The company expects the transaction to be completed by the second half of 2022, NMC Health said in a statement, without identifying the buyer or specifying the deal value.

"The successful sale of NMC’s last substantial non-core international asset represents an important milestone as we take the final steps to exit the administration process as NMC emerges as a robust, focused, profitable, customer-centric business," Michael Davis, chief executive of NMC Healthcare, said.

NMC Health collapsed in 2020 after a report by activist investor Muddy Waters alleged that the company had inflated its cash balances and understated its level of debt. A subsequent investigation revealed more than $4 billion of hidden debt that led to the company’s failure.

NMC is one of the biggest privately-owned healthcare groups in the UAE, which had 200 healthcare units in 17 countries prior to being placed into administration in April 2020.

NMC Health is expected to come out of administration after its creditors approved a restructuring process last year.

The company has divested all its non-core international assets, it said.

In 2019, NMC Health formed a joint venture with Hassana Investment Company, the investment unit of Saudi Arabia's General Organisation for Social Insurance. It contributed five of its private hospital assets and an additional cash injection to own 53 per cent stake in SMCG (formerly NMC KSA). SMCG’s portfolio now includes seven hospitals and three clinics in Saudi Arabia.

"This sale marks an important step for NMC. With the support of our creditors and partners, we have made excellent progress through the administration process," Richard Fleming, managing director of Alvarez & Marsal Europe and joint administrator of NMC and NMC Healthcare, said.

"The sale announced today is one of the final pieces in this jigsaw, as we position NMC to deliver its long-term growth plan."

Updated: March 21, 2022, 10:57 AM