NMC Healthcare plans to file for administration
NMC Healthcare, the UAE's largest private hospital operator, said on Wednesday that it plans to file for administration in Abu Dhabi.
NMC Healthcare, part of the debt-ridden holding company NMC Health, plans to file for administration with the Abu Dhabi Global Markets financial centre, it said in a presentation posted on its website.
NMC Health, the London-listed holding company for the hospital group, has already gone into administration in April amid allegations of fraud and the disclosure of more than $4 billion in hidden debts, leaving both UAE banks and overseas lenders with heavy losses and prompting legal battles. The total debt of the holding group, mired in scandals involving its founder BR Shetty and former directors, now stands at $6.6 billion.
Apart from NMC Healthcare, the holding firm NMC Health has interests in ownership, operation and management of pharmaceuticals, medical equipment, general food and consumer goods; software solutions including property, stock and inventory management software and home healthcare services.
On Wednesday, the NMC Health said it received expressions of interest from more than 60 potential bidders for its international fertility business, one of the first non-core assets it plans to sell as part of a recovery plan.
NMC's acting CEO Michael Davis said the Boston IVF business may be included in the sale process alongside the Spain-based Eugin IVF unit.
The hospital operator's decision to file for administration come in the wake of unveiling a three-year recovery plan involving a debt moratorium, debt restructuring and asset sales. The hospital operator had secured a $250 million financing facility. Abu Dhabi Commercial Bank, the biggest creditor to NMC with an exposure of nearly $1 billion, is providing a bulk of the new financing.
NMC Healthcare said Alvarez & Marsal would also be appointed as administrators of the UAE business.
The administration process is similar to a Chapter 11 proceeding in the United States and will allow NMC to seek a debt-restructuring deal with dozens of lenders and sell assets to strengthen its balance sheet.
As part of its restructuring plan, NMC and its lenders will have until January 30, 2021, to deliver a binding reorganisation plan or the process will move to core asset sales.
Early this month, NMC Healthcare said the financing facility would be provided, contingent on planned second-phase restructuring. "Alongside delivering increased financial stability for the group, the next phase of the process will see an increased focus on identifying and holding to account those responsible for the illegal and fraudulent actions which created this situation and still pose a threat to the group and its stakeholders," said Richard Fleming, managing director of Alvarez & Marsal Europe and joint administrator of NMC Health.