NMC in talks with lenders to avoid administration

Dubai - On Sunday, several UAE-listed companies revealed details of their total exposure exceeding Dh7.66 billion to NMC Health as well as to Finablr.

NMC Health said on Monday it is in discussions with Abu Dhabi Commercial Bank and other creditors "to address their concerns" while it seeks to avoid the appointment of administrators as proposed by ADCB through an application filed with a high court in London.

In a statement to the London Stock Exchange, the debt-ridden NMC Health said it did not believe that bringing the company under a court-appointed administration would be in the interests of stakeholders as a whole.

Abu Dhabi Commercial Bank had announced a Dh3 billion exposure to NMC Health. On Sunday, several other UAE-listed companies revealed details of their total exposure exceeding Dh7.66 billion to NMC Health as well as to Finablr, a global payments platform that was also founded by NMC founder BR Shetty.

The LSE announcement released by Simon Watkins, NMC Group Company Secretary, said "the resolution with lenders is likely to involve changes to corporate governance at the company and the composition of the board itself".

The embattled NMC, which has accumulated debt to the tune of $6.6 billion, much more than the $5 billion disclosed in March and far higher than the $2.1 billion declared in its accounts, has named Faisal Belhoul as its new executive chairman a few days ago.

On Saturday, Belhoul called for a "temporary standstill" of NMC debts from creditors to allow the company time to prepare and activate a recovery plan.

In his statement, Belhoul had argued that there are considerable downsides to the company and its creditors if NMC would be placed into administration. "This would cause instability to the operating businesses of the NMC Group, creating additional pressure on the group's liquidity and reducing value for all creditors. This would be damaging not only to the interests of creditors but, in the midst of the Covid-19 crisis, would potentially put lives at risk," Belhoul said.

The new NMC chief had vowed that he would do all in his power to cooperate with authorities in the UAE and the UK to recover misused funds and ensure those involved in any wrongdoing were prosecuted.

issacjohn@khaleejtimes.com