NMC expects to be placed into administration

Troubled NMC Health, which has been desperately trying to secure a crucial standstill agreement with creditor banks for debts running into several billion of dollar, said on Wednesday that it expects to be placed into a court-appointed administration in due course.
The embattled firm said in a statement to the London Stock Exchange that its board had informed a London High Court ahead of a crucial hearing scheduled for today that "notwithstanding strenuous efforts to address creditors' concerns, it has not been able to secure their alignment and support and has been advised by its counsel that it is not in a position to oppose the application successfully.  Accordingly, it expects the company to be placed into administration in due course."
A London high court is to hear NMC Health on a petition filed by Abu Dhabi Commercial Bank, the debt- ridden healthcare provider's major creditor, seeking to place the firm under administration.
NMC 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. Following US short-seller Muddy Water's disclosure of financial irregularities and inflated bottom lines in December, NMC has been in turmoil as several other UAE-listed companies revealed details of their total exposure exceeding Dh7.66 billion to NMC Healthcare as well as to Finablr, a global payments platform that was also founded by NMC founder BR Shetty.
On Sunday, Dubai Islamic Bank and its subsidiary Noor Bank announced Dh2 billion exposure to NMC while Emirates NBD and its Shariah-compliant unit Emirates Islamic Bank revealed Dh747.34 million exposure. Ajman Bank has Dh151.8 million while Al Salam Bank pegged its exposure at Dh161.5 million. Abu Dhabi Islamic Bank said it had extended Dh1.07 billion in financing to NMC Healthcare, and an additional Dh113.67 million exposure to Islamic bonds issued by NMC. National Bank of Fujairah pegged its exposure to NMC at Dh289.1 million, while Sharjah-based United Arab Bank said its exposure was Dh135.3 million.
Last month the company named Faisal Belhoul as its new executive chairman.
Belhoul had called for a "temporary standstill" of NMC debts from creditors to allow the company time to prepare and activate a recovery plan, arguing there are considerable downsides to the company and its creditors if it 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," he said. 
- issacjohn@khaleejtimes.com