NMC hopes turnaround plan will shift focus from past events to its future as a key healthcare player
The company generates about 80 per cent of its earnings in the UAE, Michael Davis says
NMC Healthcare hopes the new turnaround plan it has presented to stakeholders will help to shift the attention away from the events of the past eight months and bring its future as a key healthcare provider in the UAE and Oman in focus, its acting chief executive said.
“For me, it’s been quite frustrating because there’s not been a headline since December that didn’t begin with ‘Embattled UAE healthcare operator’ [or] ‘Troubled NMC Healthcare’,” Michael Davis told The National in an interview this week.
“We’re in a operational turnaround, we’re in a financial turnaround but we’re also in an reputational turnaround.”
NMC Healthcare was placed into administration in April after the company reported "suspected fraudulent activity" and more than $4 billion (Dh14.7bn) of previously unreported debts, bringing its total debt to more than $6.6bn. It is the biggest private healthcare company in the UAE, with between 13,000-15,000 employees and about 1,800 doctors.
NMC Health's survival 'relies on company securing $250m debt'
It presented a three-year turnaround plan to lenders on Wednesday that focuses on its operations in the UAE and Oman. It involves divesting non-core businesses such as NMC Trading, two IVF companies – Luarmia and Boston IVF – UK-based Aspen Healthcare and a joint venture it has with Saudi Arabia's General Organisation for Social Insurance. The plan involves putting the group through an administration process at the ADGM Courts and raising $300 million of new funds from existing lenders.
“Seventy-four per cent of our business is here [UAE] and in Oman,” Mr Davis said.
“To focus on our core provides the best value for the stakeholders," he added, pointing out that 80 per cent of its earnings before interest, tax and amortisation comes from its UAE operations.
NMC Healthcare is forecasting gross revenue will fall 16 per cent in 2020, which is mainly due to impact of the Covid-19 pandemic.
Dealing with the pandemic at the same time as the administration process has proved difficult, but Mr Davis said administrators from Alvarez & Marsal have, for the most part, allowed him to focus on running the business.
"It’s frustrating because every minute of every day, while Maria [Simovic, managing director at Alvarez & Marsal] and I are dealing with the administration and the fraud, we have literally tens of thousands of employees that are taking care of patients at the point of care that really couldn’t care less about the fraud," Mr Davis said.
"All they [the employees] care about is having a sense of purpose, and worthwhile work and having the tools they need to their jobs.”
As the pandemic unfolded, more than 200 of NMC's staff were quarantined and others became ill while treating patients.
“It was dangerous for the frontline workers,” he said. “We’ve really had to differentiate between what was happening at the top with the fraud [investigation] and the uncovering of the debt and the administration procedures, with what our core and fundamental driving purpose is, which is caring for our patients and doing so in the middle of the worst pandemic in the last 100 years."
Once the dust settles and the narrative shifts, Mr Davis hopes to be able to "celebrate some of those frontline heroes and some of the staff" who have worked hard over the past four months.
Updated: August 20, 2020 05:45 PM