Abu Dhabi’s ADGM appoints administrators for NMC Health

The Abu Dhabi Global Market (ADGM) Courts have appointed Richard Fleming and Ben Cairns of Alvarez & Marsal as administrators for NMC Healthcare’s group of operating companies and businesses.

The administrators would lead the financial restructuring of 36 NMC’s entities and enable them to secure an additional $325m financing facility, whilst protecting the businesses from creditor action, as per the court’s decision.

The decision does not apply to businesses outside the UAE, official news agency WAM reported.

The NMC Group will be subject to guardianship procedures “to a limited extent”, the courts said in a statement.

All hospitals, medical centers and clinics under the guardianship will continue to provide health care services to patients as per stipulated international standards and without any change.

The group’s management team and the two legal guards will also work in coordination with government agencies, regulatory and legislative bodies, and relevant stakeholders.

The statement added that the healthcare group continues to achieve strong performance within its main operational activities, and has contributed substantially to tame the spread of the Covid-19 pandemic.

Michael Davis, acting CEO and COO of NMC Healthcare, said: “This is a positive next step in NMC’s restructuring process, allowing us to address the financial challenges we’ve faced since the fraud was uncovered earlier this year. NMC is a strong business operationally and we will continue to function as usual and care for our patients through the administration period. The financial restructuring will offer additional security to the company and allow us to continue to contribute effectively to the healthcare system in the UAE.

Richard Fleming, Managing Director of Alvarez & Marsal and Joint Administrator, said: “This is a ‘light touch’ administration that will protect NMC from aggressive creditor action whilst bringing new funding and addressing the level of debt in the business. As part of the administration, the administrators have arranged $325m of additional financing to ensure we have sufficient funds to support the business through the Covid-19 disruptions and financial restructuring process. All hospitals, medical centres, care facilities and other operations in the group affected by the administration will continue to operate as they have to date.”

The group inaugurated its new NMC Royal Medical Centers in Karama and Shahama earlier in the year, which have seen over 6,000 patients collectively since then. It also opened its CosmeSurge Hospital in Jumeirah, Dubai in July 2020.

Founded by Indian entrepreneur Bavaguthu Raghuram Shetty, NMC had a market value of $10bn at its peak on the London Stock Exchange before allegations of fraud pushed it into administration.

Read: NMC heads to administration after bowing to creditor demands

The firm has revealed more than $4bn of undisclosed borrowings, giving it a total debt of $6.6bn.

Shetty has said that he is the victim of a fraud that also resulted in the administration of NMC’s sister company, foreign-exchange operator Finablr.

Read more: Finablr Founder Shetty Resigns as Indian Court Closes Net on NMC