The executive chairman of NMC Health, Faisal Belhoul, called for the administration process of the UAE’s biggest healthcare company to be conducted in an expedited manner with the goal of stabilising the company.
NMC Health was placed into administration at a High Court ruling in London on Thursday following an application from Abu Dhabi Commercial Bank, the company's biggest creditor which is owed $981m (Dh3.6bn) from the company. Joint administrators from Alvarez & Marsal were appointed to handle the company's affairs.
In a statement to The National ,Mr Belhoul said he wanted administration to be conducted "quickly and smoothly, with the core objective of keeping the organisation stable and in a position to provide vital medical care to support the people, the government and ... the UAE during the Covid-19 pandemic".
“The continuity of the executive leadership must also be maintained,” he added. “This measure will ensure that the highest operating standards and quality of care continue to be delivered in this time of great need."
Banks and creditors involved in the administration process "have a clear and pressing duty to extend credit lines and ensure that the company has the necessary liquidity to maintain healthcare operations and must continue to support the salaries of thousands of healthcare workers at this time,” he said.
Mr Belhoul became executive chairman of embattled NMC Health on March 26 after his Dubai-based private equity firm, Ithmar Capital, secured a 9 per cent stake in the business. He had been attempting to negotiate a standstill agreement with lenders to give the company more time to restructure its debts.
Following the appointment of administrators, ADCB said it had taken action "in response to recent developments, including the revelation of previously undisclosed liabilities of over $4bn, which suggests a significant risk of insolvency".
It said Alvarez & Marsal "will take immediate control and will work on behalf of all stakeholders".
"Their priority is to ensure stability and the continuation of uninterrupted healthcare services at the Group’s medical facilities. The joint administrators are also tasked with implementing robust governance, conducting a full, transparent investigation into suspected previous irregular financial activity and taking adequate steps to initiate the recovery of any missing assets and funds."
NMC Health, which was founded by BR Shetty in Abu Dhabi in 1975, has made a series of damaging disclosures in the past few months after a report by activist investor Muddy Waters in December alleged it inflated cash balances, overpaid for assets and understated its debt.
Last month, the company said debt stood at $6.6bn (Dh24bn), substantially higher than the $2.1bn declared in its last filed accounts. A review committee also discovered evidence of "suspected fraudulent behaviour".
Following the disclosures, two joint non-executive chairmen, including Mr Shetty, an executive vice-chairman, a chief executive, chief financial officer and a member of the company’s treasury department all departed from the company.
Earlier this week, UAE companies were asked by market regulators to disclose their exposure to NMC Health, and to the Finablr Group that is owned by Mr Shetty and its foreign exchange business UAE Exchange.
Local banks disclosed just over Dh8bn of exposure to NMC Health and over Dh10bn to the three companies combined.