NMC Health's UAE and Oman assets put up for sale

Process is running alongside a plan for a lender-led restructuring

A sale process for NMC Health's UAE and Oman assets is being run by Perella Weinberg Partners and Resonance Capital . Reuters

NMC Health's administrators have begun a sale process to flush out potential bidders for its core healthcare businesses in the UAE and Oman.

The sale is being run by financial advisers Perella Weinberg Partners and Resonance Capital in parallel to restructuring discussions that are ongoing with the group's 80-plus local, regional and international lenders.

The company said in a presentation to lenders that its core business achieved gross revenue of $1.54 billion last year, 6.1 per cent lower than in 2019.

However, savings achieved on labour, cost of goods sold and other expenses meant earnings before interest, tax, depreciation, amortisation and one-off costs were just 1.7 per cent lower at $106.3 million. It incurred one-off costs, including restructuring costs, of $7.9m.

Last year was "tumultuous" for the organisation, the company's chief executive, Michael Davis, said during a media briefing on Wednesday evening.

"We faced many macro issues with the Covid-19 pandemic that are more global issues, and also more internal issues with the discovery of the fraud and the undisclosed debt. But in spite of that, I am very, very proud of the organisation in 2020 and we did quite well," he added.

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NMC Health was placed into administration in April last year following the discovery of more than $4bn worth of previously undeclared debts at the group, which was founded by BR Shetty in 1975 and grew to become the biggest privately-owned healthcare company in the UAE. In total, the group owes more than $6.8bn in loans and guarantees.

Its main UAE trading arm, NMC Healthcare, was placed into administration in the Abu Dhabi Global Market Courts in September to stave off claims filed in the Emirates. The ADGM ruling was recognised by the DIFC Courts in November, meaning six claims filed against the company in that jurisdiction have now been stayed. The company is also facing 15 actions from lenders in onshore courts.

Administrators devised a three-year turnaround plan based on its core UAE and Oman operations in August. A number of non-core assets have already been sold off, including the Eugin Group of fertility clinics in Spain, the US and Latin America, for €430m in December.

Discussions around other non-core sales, including UK-based Aspen Healthcare, are ongoing.

"If the right buyer comes along at the right price we'll further push along the sale of the non-core assets," Mr Davis said.

NMC is also still in talks with Hassana Investment Company, part of Saudi Arabia's General Organisation for Social Insurance, about its joint venture in the kingdom, which is not part of a formal sale process, Mr Davis said.

"It's important for us to ensure we bring the most value for the stakeholders, so discussions ... are ongoing but as it is right now it's business as usual in Saudi Arabia," he said.

Both the sale and the lender-led restructuring process being considered for the core UAE and Oman operations are for the business as a whole and a break-up is not under consideration, Mr Davis said.

"At this point, the business is worth more as a whole," he said.

The presentation document to lenders states that a preliminary assessment indicates there is "higher recovery expectations for creditors from a plan of reorganisation scenario" than from a sale.

Once it has received offers from qualified bidders, the company and its stakeholders "will evaluate those bids alongside the proposed plan of reorganisation", it said.