KBBO hires restructuring expert for $2bn debt revamp

Abu Dhabi-based KBBO Group, once one of NMC Health’s biggest shareholders, has hired a turnaround specialist to restructure its $2bn debt pile, people familiar with the matter said.

The privately-held investment firm with assets in health care and food named Bruno Navarro as its chief restructuring officer, the people said, asking not to be identified because the matter is private.

Navarro has been involved with some of the biggest and most complex debt situations in the Middle East as head of restructuring at Abu Dhabi Commercial Bank and Abu Dhabi Islamic Bank. He has also worked at the International Finance Corporation, a World Bank affiliate, on restructurings in Latin America and Southeast Asia.

KBBO has about $2bn in debt that needs to be renegotiated, leaving banks in the United Arab Emirates potentially exposed to another financial hit even as they grapple with a spike in bad loans amid the coronavirus pandemic.

Almost 40 KBBO creditors, including Dubai Islamic Bank and Mashreq bank as well as London-based HSBC Holdings, have set up two separate steering committees for both the health care and consumer arms of the business, the people said.

The consumer group lenders are being advised by consultancy Deloitte LLP, the people said.

HSBC declined to comment.

Representatives for KBBO, Mashreq, Dubai Islamic Bank and Deloitte didn’t immediately respond to messages seeking comment.

NMC Woes
KBBO’s reorganisation is being supervised by the UAE’s Financial Restructuring Committee, a relatively new bankruptcy process in Abu Dhabi that is also being used by contractor Drake & Scull International.

KBBO said in early July it’s being advised by boutique firm Trussbridge Advisory Ltd. and consultancy firm PwC on its restructuring.

The firm had said at the time that it had been “challenged” by its exposure to NMC and the coronavirus outbreak, which impacted operations.

KBBO chairman Khalifa Bin Butti Omeir Al Muhairi had stepped down as vice-chairman of NMC in February amid confusion over the exact size of his stake in the hospital operator, which is now being run by administrators Alvarez & Marsal.

​Al Muhairi had pledged NMC shares as collateral against loans, according to a December 2017 filing. He sold a combined 15 per cent stake in the company along with former director Saeed Mohamed Butti Mohamed Khalfan Al Qebaisi in January.

NMC’s shares plunged amid allegations of fraud in mid-December before being suspended on the London Stock Exchange. KBBO and some of NMC’s other major shareholders also held a significant stake in financial services firm Finablr, which too has been suspended.

KBBO Group has a venture with Guggenheim Partners offering “advisory services” to local family offices and institutional investors.

KBBO holds stakes in food retailers, private schools and owns “one of the largest privately owned art collections” in the Gulf with pieces by Matisse and Picasso, according to its website until it was taken down weeks ago.