UAE hospital operator NMC Healthcare plans to invest “millions of dollars” to open new centres in the Emirates, its chief executive has said, as it continues to recover following a 2020 accounting scandal that forced a restructuring.
The amount will underpin plans to open nine hospitals and clinics across the UAE in the next two years, David Hadley told The National on Thursday.
The investment mirrors the company's “good position” after the restructuring process, he said at the Gitex Global technology conference in Dubai.
The new centres are aimed at “capturing the incredible growth” of the country's healthcare sector, Mr Hadley added.
Abu Dhabi-based NMC was founded by BR Shetty in 1975, growing from a single clinic to become the UAE’s biggest privately owned healthcare operator, employing thousands of people.
However, the business crashed after a report from short seller Muddy Waters in December 2019 alleged that the company had inflated the value of its assets and understated its debt. An independent investigation uncovered more than $4.4 billion of previously unreported debt, leading to the company being placed into administration in April 2020.
The company has since regained its footing and is generating cash with “all the legal overhangs behind us now”, Mr Hadley said. NMC serves five to six million patients a year, he added. The company comprises 85 hospitals, clinics and medical centres under several brands, according to its website.
“We are in a good position to be able to grow and the board has been very supportive of us to look at these opportunities,” Mr Hadley said.
Among these opportunities is an initial public offering, which NMC first floated in June following its appointment of Rothschild as a financial adviser to help it explore options for its shareholders.
The company’s shares were listed on the London Stock Exchange in 2012 and at its peak in 2018, it was valued at £8.58 billion ($10.9 billion). It was delisted in 2020 after it entered administration.
Any IPO “would take a couple of years to consider”, so at the moment, NMC's focus is “exploring all options … on the best strategy to take the business forward”, Mr Hadley said.
“We haven't landed on one at this stage … but whatever we decide on, we will ensure that it's for the long-term sustainability of NMC going forward,” he added.
NMC is also hiring, Mr Hadley said, without disclosing specifics. Part of the restructuring was ensuring staffing levels were correct, he said.
“We look at pockets of where there are population growths and we look at what need and what facilities are required for that population, then look at what amount of people we need,” he said. A typical 150 or 200-bed hospital would need about 1,500 staff, he added.
Expansion plans
While mainly focused on the UAE, NMC is also considering potential expansion into other markets in the region, such as Saudi Arabia and Egypt.
About 60 per cent of NMC's revenue comes from Abu Dhabi, according to Mr Hadley. Dubai is a “big focus” and has grown significantly since the opening of NMC's two hospitals, while the Northern Emirates are expanding “at a very rapid pace”, he said.
“We keep an eye on all markets … but we can only do so much and there's big and sufficient opportunity for us to focus on the UAE,” he said. NMC will consider regional markets if they find “equal opportunity”, he added.
Digital strategy
Within its operations, NMC is continuing to implement a digital strategy to tap into technology vital to health care. It has partnered with US company Oracle to use its cloud service.
Emerging technologies are able to address “thousands of use cases”, from report generation to remote surgeries, said Leopoldo Boado, senior vice president for business applications at Oracle.
“AI is the centre of everything … it makes automated tasks much more productive, with the possibility to create your own use cases, specifically for the healthcare industry,” he told The National.
Implementing new innovations will also boost NMC in its post-restructuring era; the partnership with Oracle and general ramping up of its tech ecosystem will serve as a “backbone” for its operations, especially as patient demand increases, Mr Hadley said.
Big tech partnerships create more confidence in NMC, especially after “a lot of challenges and question marks about [our] financial situation”, he added.
“We are doing things the right way and the numbers that we produce and can show are trusted and solid,” he said.
