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NMC Health trying to fend off administration move by ADCB
6th Apr 2020 07:17
(Sharecast News) - Beleaguered Gulf hospital group NMC Health said it was trying to get Abu Dhabi Commercial Bank (ADCB) to withdraw a legal application proposing that NMC be placed under administration.
NMC, which has seen its shares suspended over an accounting and shareholding scandal, said any resolution with lenders was likely to involve changes to corporate governance at the company and the composition of the board itself.
ADCB's exposure to NMC amounts to around $981m. The bank is also a lender to Travelex owner Finablr. Both firms were founded by Indian billionaire BR Shetty.
On Sunday, Emirates and Dubai Islamic Bank disclosed hundreds of millions of dollars of exposure to NMC and associate companies.
NMC's debt at last count was $6.6bn, up from the $2.1bn reported at the end of last June. Shetty recently quit as chairman along with the chief financial officer.
US short seller Muddy Waters raised questions about the company's true level of debt in December. NMC vigorously denied the allegations and hired a former FBI director to investigate the claims.
However, the stock was suspended in February after the investigation turned up inconsistencies in its finances and the UK's Financial Conduct Authority opened an investigation into the business.
NMC's new executive chairman Faisal Belhoul said did not want to prioritise any one creditor as he asked for more time to resolve the crisis.
"Departing from these principles by acceding to the demands of any individual creditor would jeopardise the operating businesses of the NMC Group, increasing the risk of customers and suppliers terminating contracts or re-negotiating terms and putting even more pressure on the group's liquidity," he said.
"ADCB is putting its own interests above not only other creditors, but also the health and safety of UAE residents amid an escalating pandemic."
NMC, which has seen its shares suspended over an accounting and shareholding scandal, said any resolution with lenders was likely to involve changes to corporate governance at the company and the composition of the board itself.
ADCB's exposure to NMC amounts to around $981m. The bank is also a lender to Travelex owner Finablr. Both firms were founded by Indian billionaire BR Shetty.
On Sunday, Emirates and Dubai Islamic Bank disclosed hundreds of millions of dollars of exposure to NMC and associate companies.
NMC's debt at last count was $6.6bn, up from the $2.1bn reported at the end of last June. Shetty recently quit as chairman along with the chief financial officer.
US short seller Muddy Waters raised questions about the company's true level of debt in December. NMC vigorously denied the allegations and hired a former FBI director to investigate the claims.
However, the stock was suspended in February after the investigation turned up inconsistencies in its finances and the UK's Financial Conduct Authority opened an investigation into the business.
NMC's new executive chairman Faisal Belhoul said did not want to prioritise any one creditor as he asked for more time to resolve the crisis.
"Departing from these principles by acceding to the demands of any individual creditor would jeopardise the operating businesses of the NMC Group, increasing the risk of customers and suppliers terminating contracts or re-negotiating terms and putting even more pressure on the group's liquidity," he said.
"ADCB is putting its own interests above not only other creditors, but also the health and safety of UAE residents amid an escalating pandemic."