FILE PHOTO: General view of NMC specialty hospital in Abu Dhabi, United Arab Emirates, February 11, 2020. REUTERS/Satish Kumar/File Photo
July 12, 2020
By Saeed Azhar and Davide Barbuscia
DUBAI (Reuters) – Troubled hospital operator NMC Health’s entity in the United Arab Emirates (UAE), NMC Healthcare LLC, is considering applying for restructuring and insolvency proceedings locally, two sources familiar with the matter said.
The move comes three months after NMC Health Plc <NMMCF.PK>, the London-listed holding company for the hospital group, went into administration in April after months of turmoil over its finances.
The two sources told Reuters that NMC Healthcare LLC was looking at options to file under the jurisdiction of Abu Dhabi Global Markets (ADGM), which has its own laws relating to insolvency and corporate restructuring.
Such a move would help create a framework for the recognition of debt claims while the administrators of NMC Health Plc finalise the scheme of arrangement with creditors, one of the sources said.
A third source said the ADGM move is an option to obtain protection from the court from any enforcement proceedings from creditors, similar to Chapter 11 in the United States.
A scheme of arrangement is a binding agreement about payment of all, or part of, a firm’s debts over a period of time.
The administrators for NMC Health declined to comment.
The ADGM Registration Authority does not comment on its regulatory operations or disclose its engagements with external entities publicly, it said in an email.
NMC Health is the largest private healthcare provider in the UAE, operating more than 200 facilities including hospitals, clinics and pharmacies.
NMC’s operating entities were unaffected by the appointment of administrators in April and services continued.
That is unlikely to change as UAE authorities are keen to ensure hospital services in the Gulf state are not affected during the coronavirus pandemic, the second source said.
NMC’s implosion this year amid allegations of fraud and the disclosure of more than $4 billion in hidden debts has left some UAE banks and overseas lenders nursing heavy losses and prompted legal battles to try and recover money owed.
The troubles began in December when short-seller Muddy Waters raised concerns over the company’s financial statements and were compounded by doubts over the size of stakes of major shareholders, including founder BR Shetty.
(Reporting by Saeed Azhar and Davide Barbuscia; editing by Emelia Sithole-Matarise and Louise Heavens)