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NMC Healthcare plans handover to new ownership before end of year

November 2, 2021

The hospital operator ran into trouble in 2020 after the disclosure of over $4bln in hidden debt that left many UAE and foreign lenders with big losses

UAE-based hospital operator NMC Healthcare (NMC) is planning to exit administration and handover to the new ownership before the end of the year.

The largest private healthcare company in the UAE today reported Q3 revenues of $915 million. The number of patient encounters so far this year across the group is 6.7 million.

The hospital operator ran into trouble in 2020 after the disclosure of more than $4 billion in hidden debt left many UAE and foreign lenders with big losses.

NMC had secured approval for its restructuring proposal from 95 percent of its creditors on September 1.

The company, creditors and advisors are working to secure the final regulatory and other approvals to ensure that NMC can complete the restructuring and can exit administration by the deadline of December 16, 2021, according to a statement.

Richard Fleming, Managing Director of Alvarez & Marsal Europe and Joint Administrator of NMC PLC and NMC Healthcare said: “We are looking forward to successfully delivering the new NMC Health out of administration to its new owners on 16 December 2021.'

As part of the proposed deeds of company arrangement (DOCA) accepted by creditors of NMC, 34 companies of the healthcare provider will exit administration. The companies that exit the administration will be part of a new entity controlled by creditors.

Abu Dhabi Commercial Bank (ADCB), one of NMC's largest creditors, said it is expected to receive 39 percent of transferable exit instruments in a new $2.25 billion facility.

'Participants in the exit instruments will receive interest payment for the facility, which will ultimately be repaid from the proceeds generated from a sale of the underlying business at a later stage. There are further possibilities for the participants to benefit from any rise in the valuation of the NMC business as well as any recoveries made by NMC from its ongoing litigation strategies,' ADCB said in a statement.

However, NMC Healthcare itself will remain in administration to pursue certain potential litigation claims on behalf of itself and the other DOCA companies, any proceeds of which will be distributed to the relevant creditors in accordance with the terms of the DOCAs.

'After significant operational and financial restructuring NMC is better placed than ever to take advantage of the new opportunities ahead ensuring that the excellent quality of care offered to patients in the Group’s facilities continues,” Fleming added.


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