Abu Dhabi insurer steps in to help NMC Health pay salaries

An Abu Dhabi-owned insurer is helping NMC Health pay overdue bills, according to people familiar with the matter, in what could be a sign the emirate is stepping in to help the embattled hospital operator.

The National Health Insurance Co., known as Daman, is speeding up payments to Abu Dhabi-based NMC so it can pay salaries and other invoices, the people said.

Read: UAE’s First Abu Dhabi Bank sells 2.5 million shares held by NMC’s BR Shetty

The move by Daman, which is 80 per cent-owned by Abu Dhabi’s government and the rest by Munich Re, is seen as an intervention by the oil-rich emirate to address a cash shortfall.

It also shows the extent of troubles at NMC, which was once a darling of London stock markets and an example of a Middle Eastern success story.

Banks have been reluctant to lend to London-listed NMC since Muddy Waters Capital accused it of financial improprieties in December.

The company earlier this month asked lenders for an informal standstill on its existing facilities.

“Daman’s relationship with its partners is governed by regulatory guidelines and agreements that stipulate how and when payments are made,” according to a company statement. “Daman complies with all standards and agreements.”

Shares of NMC, founded by Indian billionaire Bavaguthu Raghuram Shetty, have been in freefall since the Muddy Waters report. The stock was suspended on February 27 and will be relegated to the mid-cap FTSE 250 Index when trading resumes.