NMC exit plan approved

CREDITORS of NMC Health, a UAE-based firm, have given their approval to a restructuring that will allow 34 group companies to exit the administration in Abu Dhabi and continue to run the core business. NMC Health is a former FTSE 100 private healthcare group which was embroiled in fraud.

In recent days, the creditors gave their “overwhelming” support for an effective debt-for-equity swap called a deeds of company arrangement, The Times reported.

A new holding firm will be set up and controlled by creditors with a future value estimated at £1.6 billion. Unsecured creditors like Barclays are owed an estimated £5.1bn and are likely to get 15.5 per cent of the debt or $792 million, the report said.

While the company’s main creditor is Abu Dhabi Commercial Bank, HSBC and Standard Chartered were among British creditors although both were learnt to have sold the debt.

A court in Abu Dhabi still needs to confirm the vote, NMC said and once it is done, it could take three to five months to complete the transfer of shares and assets to the new NMC entity and to get clearance from government bodies. At that point of time, the operating entities will exit the administration.

NMC was set up by Indiaborn tycoon Bavaguthu Raghuram Shetty in the 1970s and became the biggest private healthcare provider in the UAE. It operated in 19 countries, including the US and the UK, where it was floated in 2012.

However, in 2019, Muddy Waters, a US-based short seller, raised issues related to accounting and governance at the firm.

Freeh Group, a risk-management firm commissioned by NMC investigated and it led to the discovery of $6.6bn in debt, almost triple the figure the company had reported in mid-2019.