Oman's Taageer Finance and Sohar disclose 4.67m rial exposure to NMC

Sohar Bank 'rejected multiple requests' from NMC for additional credit facilities and to roll-over a maturing loan

Abu Dhabi Commercial Bank started criminal legal proceedings with the attorney general in Abu Dhabi against a number of individuals in relation to NMC Health. Victor Besa / The National 

Oman's Taageer Finance and Sohar International Bank disclosed they have exposures to embattled UAE healthcare company NMC Health.

Taageer, which provides car finance and funding for industrial equipment, said in a statement on Monday to the Muscat Securities Market that it had a 1.23 million rial (Dh11.72m) exposure to NMC.

The Oman Investment Fund holds a 33.6 per cent stake in Taageer Finance and is the largest shareholder.

Sohar International Bank said its exposure stood at  3.45m rials.

"The bank is considering all options and measures available to it, including enforcement of legal rights, to ensure realisation of the outstanding amount," the lender said in a statement to the Muscat bourse on Monday.

Sohar said it "rejected multiple requests from the company for additional credit facilities worth 43m rials", including a request to roll over the maturing loan, which was paid off in December 2019.

The loan amount to NMC represents 0.1 per cent of Sohar Bank's total assets.

"The prudent and diligent measures taken by the bank not only significantly reduced the exposure but also avoided a substantial increase of exposure to this company," Sohar said.

NMC was placed in administration by a UK court on the application of one of its biggest lenders, Abu Dhabi Commercial Bank, last week.

The joint administrators from turnaround advisory firm Alvarez & Marsal will take immediate control of NMC Health and will work on behalf of all stakeholders, ADCB said on Thursday.

Taageer's disclosure comes after HSBC Bank Oman revealed on Sunday that NMC owes it $16m (Dh58.76m), about 0.2 per cent of its total assets.

Bank Nizwa, also listed on Muscat Securities Market, said last week that it had a 5m rial exposure to the healthcare company through a subsidiary, Elegant Medical Centre.

Apart from ADCB, number of UAE banks also extended financing to NMC and they include Emirates NBD, Abu Dhabi Islamic Bank and Dubai Islamic Bank.

ADCB has an exposure of $981m to NMC. Its exposure increases to $1.16 billion when Finablr, another company owned by NMC Health's founder B R Shetty, is factored in. Finablr is not in administration.

Overall, UAE banks have a combined exposure of at least Dh8bn to NMC.

NMC made a series of damaging disclosures in the past few months after a report by activist investor Muddy Waters in December alleged that it had inflated cash balances, overpaid for assets and understated its debt.

Last month, the company revealed its debt stood at $6.6bn, substantially higher than the $2.1bn declared in its last filed accounts. A review committee also discovered evidence of “suspected fraudulent behaviour”.

After the disclosures, two joint non-executive chairmen, including Mr Shetty, as well as the executive vice-chairman, chief executive, chief financial officer and a member of the treasury department left the company.

NMC appointed Ithmar Capital's managing partner, Faisal Belhoul, as executive chairman on March 26 after the Dubai private equity firm took a 9 per cent stake in the healthcare company.

In February, the UK’s Financial Conduct Authority launched an investigation into NMC's activities after the company's shares were suspended from trading on the London Stock Exchange.