UAE: NMC group set to exit administration
Group has received creditor approval for proposed deeds of company arrangement restructuring process
NMC Healthcare Ltd, the largest private healthcare company in the UAE, said it is set to secure release from court-appointed administration that would enable its 34 companies to exit administration and continue to operate the core business of the group.
An NMC Healthcare statement said the group has received creditor approval for the proposed deeds of company arrangement (Doca) restructuring process at the landmark vote on Wednesday.
“The 35 Docas were approved with overwhelming support. Of those eligible to vote on a consolidated basis, 95 per cent of the creditors voted in favour. Full results by entity will be available on the NMC website in the coming days,” the company said.
Once confirmed by Abu Dhabi’s international financial centre, the Abu Dhabi Global Market (ADGM) courts, implementation is expected to take between three and five months to complete the transfer of shares and assets of the Doca companies as well as obtaining clearance from the appropriate government entities, at which point the 34 operating entities will exit administration, said the statement.
Michael Davis, chief executive officer of NMC Group, said the vote marked a new dawn for NMC Healthcare and for its 11,500 employees.
“The road to get here started in February 2020, and we are grateful for the support from our broad community of stakeholders including our creditors, suppliers, the Joint Administrators, and the ADGM for helping set the company on a stable footing while our dedicated staff continued to serve our loyal patient base. History is not finished with NMC Healthcare, and we look forward to our next stage of growth working with our new owners and our continued journey toward NMC 2.0,” said Davis.
Major landmark for NMC
Richard Fleming, managing director of Alvarez & Marsal Europe and joint administrator of NMC PLC and NMC Healthcare, said the successful handover of 34 NMC companies of the NMC group to full operation as going concerns under new ownership would be a major landmark for NMC and the joint administrators.
“This historic vote will welcome an era of a ‘New NMC’ that is able to do what it does best - serve its clinical customers in the UAE and deliver value to its stakeholder communities - with its operational future safeguarded,” said Fleming.
NMC Healthcare Ltd itself will remain in administration in order to pursue certain potential litigation claims on behalf of itself and the other Doca companies, any proceeds of which will be distributed to the relevant creditors in accordance with the terms of the Docas.
The debt-ridden NMC’s crisis that aggravated following the fleeing of its founder, Indian businessman BR Shetty and his top aides amid scandalous financial irregularities, was ADGM’s first major insolvency case, and its insolvency regulation proved robust in taking a complex business, with an overhang of a massive fraud, through a transparent and fair process to fix capital structure and ensure long-term viability, while simultaneously restoring the stability of the business.
“The period between NMC entering administration and the subsequent Doca vote has been less than a year, remarkably swift by any international standard. Since the outset, NMC has benefitted from a bedrock of creditor support, as evidenced by the overwhelming support for the Docas as a restructuring option to deliver superior return to creditors,” said the NMC statement.
ADCB welcomes the move
Abu Dhabi Commercial Bank (ADCB) welcomes the approval by creditors of NMC Group of the restructuring of the company’s debt and issuance of exit instruments to its creditors.
“As a significant creditor to NMC, ADCB took proactive actions from February 2020 onwards initially taking NMC’s parent company in the UK into administration, which ultimately led to the company filing for voluntary administration in ADGM, a course of action that was identified by the company and its advisors as the most suitable route to ensure rescue and timely turnaround of the Company. Such actions also ensured operational continuity for patients, healthcare workers and other stakeholders throughout the global pandemic period. These proactive approaches were taken in response to several developments at NMC, including the revelation of previously undisclosed liabilities of over $ 4 billion,” according to ADCB statement.
“ADCB has worked closely with other creditors to support the joint administrators of the company, who prepared a three-year business plan to create and maximise value at the company’s core operations, divest non-core assets, reduce debt and ensure an orderly restructuring process,” the statement said.
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