NMC Healthcare completes application to ADGM for appointment of administrators

NMC Healthcare has completed its application to the Abu Dhabi Global Market (ADGM) Courts for the appointment of administrators.

This application was submitted following the judgement passed on September 30 by Justice Sir Andrew Smith.

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

The jurisdiction offers several benefits to companies such as NMC and its creditors, including the impartiality, independence and integrity of judges; the necessity to have enforceable judgments and orders throughout the UAE with global standing and the ability to achieve access to justice and arbitration.

Max Frangulov, managing director with Alvarez & Marsal said: “The NMC Healthcare case has been a very complex and challenging situation set in the middle of a global health crisis. We have had the privilege and responsibility of taking an array of complex groups through formal and informal restructuring processes in many jurisdictions around the world, such as Chapter 11 in the US, UK administration, Eastern Europe and Russia insolvencies. For a relatively nascent venue in its early days, it is highly commendable how ADGM has so far shown to be amongst the most responsive and professional taking best practices from various leading jurisdictions such as Chapter 11 (super priority financing) and Administration (speed and governance).

“ADGM insolvency regime was essential for NMC to secure its $325m rescue financing, helping restore stability and confidence within the organisation and patient communities it serves.”

The administrators will immediately take control of the companies in order to provide stability to the group.

A “light touch” administration process will enable the existing NMC management team to remain in control of the day-to-day operations of medical and clinical activities and enable the administrators to lead the financial restructuring dealing with the debt.

All hospitals, medical centres, care facilities and other operations subject to administration will continue to operate as they have been to date, providing treatment and care to their patients.

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