According to sources, B R Shetty’s NMC Health is all set to sign off on a $250 million debt financing from UAE banks.
The terms of the contract were agreed upon and would provide the amount that the Abu Dhabi based healthcare firm urgently needs to meet their medium-term cash flow needs, including wage payoffs.
But some bank sources speculate that the number may be higher still.
NMC had run into trouble after the financial frauds of nearly $6 billion, committed from within the firm were exposed and went into administration in the UK in April this year. The current move indicates that UAE banks are open to taking a longer-term view of their exposures to the cash-strapped NMC.
A banker familiar said that NMC’s CEO Michael Davis and Alvarez & Marsal, the NMC administrator, have been able to convince lenders that the additional $250 million will be critical for survival.
“The underlying NMC business is strong – it showed the ability to weather the COVID-19 crisis as well as the devastating fraud that was uncovered just before the pandemic struck,” he added.
It is not known if it is only one bank that makes the lending, or whether other banks are also involved.
Meanwhile, knowledgeable sources at NMC Health confirm that salary payout is now firmly back on track and timely. NMC had delayed the payment of salaries to its employees in February and this was the first time it ever happened in the organization.
The key focus is now on sustaining the business and the well-being of staff and patients. Since NMC was put under administration in April, tremendous efforts have been put into the firm and the latest development brings its administrators and management a glimmer of hope.
The Alvarez & Marsal team has accomplished plenty in the last few months as much of the initial focus was on NMC Trading, which constituted almost 30% of NMC ‘s company turnover at its peak. The company was responsible for its retail and distribution activities, and for decades had retained brand rights such as that of the Nivea skincare label. The NMC Trading portfolio also boasts of a number of other exceptionally strong brands.
Selling some of the brand rights signifies the first steps in the dismantling of the NMC empire which was established in the 1970s by Dr. B. R. Shetty. But sources say that job loss at NMC Trading was “minimal” as a result of these sales. It was clarified that the company was able to sustain much of its employees while others were absorbed by the companies that bought the brand rights.
