BR Shetty owned NMC Healthcare LLC, the UAE company of NMC Health is considering applying locally for restructuring and insolvency proceedings, according to sources familiar with the matter.
Following months of financial uncertainty, the hospital’s London-listing holding firm, NMC Health Plc, had gone into administration in April this year. The current move comes after three months of this.
Sources suggest that NMC Healthcare LLC is exploring options for filing under the jurisdiction of Abu Dhabi Global Markets (ADGM). ADGM has its own insolvency and corporate restructuring legislation.
Such a move will help to establish a debt claims identification process as NMC Health Plc administrators finalize the scheme of arrangement with creditors, one of the sources said. Also, the move towards ADGM is likely an opportunity to get immunity from creditors from any legal proceedings.
A scheme of arrangement is a binding agreement about payment of all, or part of, a firm’s debts over a period of time.
The services of NMC’s hospital facilities are unlikely to be affected with this move as the UAE government is keen on making sure that the medical services run uninterrupted keeping in mind the situation caused by the pandemic. The appointment of administrators in April also did not affect NMC ‘s operating entities, ensuring that the services continued.
NMC’s implosion earlier this year had left some UAE banks and other overseas borrows with hidden debts and heavy losses and this had sparked legal battles to recover the money owed. A hidden debt of nearly $4 billion was uncovered.
With over 200 facilities including clinics, hospitals and pharmacies, NMC is the largest healthcare provider in the UAE.
The trouble began in December when Muddy Waters, a short-seller, raised concerns about the company’s financial statements and was compounded by doubts regarding the size of major shareholders’ stakes, including founder BR Shetty.
