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Creditor claims against Abu Dhabi’s NMC Healthcare now at $6.4b, could add another $650m

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By July, the adjudication process on creditor claims against NMC will kick off. Total claims against hospital operator are at $6.4b.
Image Credit: Gulf News

Dubai: Total creditor claims against Abu Dhabi hospital operator NMC Healthcare is now at $6.4 billion, of which $6.3 billion are what it owes banks. Creditors have until end of this month to file their claims.

“We believe there are 10 main financial creditors who are yet to claim which might, if submitted, add a further $650 million to the claims total based on the companies’ records,” said a report from Alvarez & Marsal, which is overseeing the process.

“The ‘Bar Date’ for final submission of proof of debts has been set at 5pm (GST) on Friday, 30 April. The process of reviewing claims and supporting is ongoing.”

The adjudication process should play out between July to October.

NMC Healthcare, founded by Dr. B.R. Shetty in the mid-1970’s spectacularly imploded early last year after reports first came out that its financials were not transparent. That set off internal investigations that led to the ousting of the previous board of directors, including of Shetty.

Investigations are going on various fronts to affix guilt where necessary for the diversion of funds, and where possible to recover all or some of it. Several top management names are facing legal action.

A year on under administration

It was in April last year – nearly right down to the day – that NMC Health was placed under administration by a UK court order on a request made by ADCB, the bank with the highest exposure to NMC.

Since then, the firm of Alvarez & Marsal has been cleaning up the books and trying to find the true extent of the financial burden created by fund diversion by the previous management.

Operational strength

When it comes to operations, NMC UAE and Oman network continues to show more signs of health after a fairly good showing last year – and despite having to deal with the many distractions that afflicted it. It’s numbers for February this year were well ahead of forecasts.

In February, net revenues were at 8.1 per cent ahead of the business plan, helped along by “tighter cost control and acceleration of performance improvement initiatives”. This despite having to cope with “signs of a second wave of COVID-19 in the UAE”. In the first two months, gross revenues were at $201 million while forecasts were for $177 million.

These would be hugely encouraging for any prospective suitors for NMC – and in recent weeks, there have been reports that Abu Dhabi based heavyweights and overseas institutions are interested.


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