Thirty-four companies that are part of NMC Healthcare, one of the UAE's largest hospital operators, have exited administration and have become subsidiaries of a new group after the company's creditors approved a restructuring plan last year.
These companies completed a “deed of company arrangement” (DOCA) restructuring process under the Abu Dhabi Global Market (ADGM) and left administration on March 25, 2022, NMC said in a statement on Friday.
However, both UK-registered NMC Healthcare and UAE-registered NMC Healthcare will remain in administration until their restructuring and legal issues are resolved.
“Today, we exit administration with a renewed sense of purpose, a clear direction, a strong focus on who we are here to serve and an unwavering commitment to driving the future growth of NMC, strengthened by the support of creditors and a new, highly qualified and cohesive board of directors,” said Michael Davis, chief executive of NMC.
“We emerge today stronger, more resolute and resilient than ever and ready to chart our new path.”
The move partially marks an end to NMC's woes, which began after a 2019 report by short seller Muddy Waters accused the company of inflating its assets and understating 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.
NMC said earlier this year it is pressing ahead with a restructuring after 95 per cent of its creditors approved its plan to reduce its debt pile to $2.25bn. The DOCA also involves a mechanism that allows creditors to exit and generate more funds than the sale of distressed assets may yield.
Operations of all NMC companies will continue as normal and there will be no disruption to the continued trading of the NMC Group, the joint administrators said in a separate statement.
“There were moments over the past two years where it was uncertain if NMC would survive, so to be able to hand over 34 companies to a New NMC Group under creditor ownership, as thriving healthcare businesses, is a remarkable achievement,” said Richard Fleming, managing director of Alvarez & Marsal Europe and joint administrator of NMC Health and NMC Healthcare.
The companies that exited administration will be subsidiaries of the NMC Group that will be overseen by a newly appointed board of directors, the company said. The new group will operate under ADGM’s jurisdiction.
Abu Dhabi Commercial Bank, which had the most exposure among lenders to NMC liabilities, said it had appointed three of the seven new board members in the healthcare company.
Kevin Taylor, group treasurer at ADCB, becomes chairman of the board and Jean-Marc Le Jeune and Bassem Itani have been appointed as non-executive directors, the lender said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.
ADCB, which is exposed to NMC debt worth $981 million, also said it had received 37.5 per cent of transferable exit instruments in a $2.25bn facility issued by the new NMC holding company following the exit from administration.
“Holders in NMC’s exit instruments will ultimately be repaid following monetisation of the business at a later stage. Participants will benefit from any further value creation at the NMC business,” the bank said.
NMC has more than 12,000 employees and owns 65 healthcare facilities with more than 1,400 hospital beds as well as 38 pharmacies.