ADCB signs $250 mn financing deal for NMC Health

NMC revenues witness smart recovery lately

ABU DHABI: ADCB is said to have inked a $250 million financing deal with the embattled NMC Health, to help the leading healthcare provider expedite its revival process after being under Administration since April.

According to informed sources, NMC Health that has piled up an estimated $6.6 billion debt from about 85 financiers, local and international, with ADCB alone shouldering $981 million, is on a ‘back-to-business’ path with the monthly revenues lately topping $100 million despite the COVID-19 headwinds.

Talking to businessbenchmark.news over phone, a source close to NMC Health said the company is doing well now and has even over-achieved the budgeted revenues in the past few months.

“If the current revenue trend continues, the annual top-line reaching $1.225 billion looks quite possible. And this could translate very well into an EBIDTA of about $175 million,” he exuded confidence.

At the same time, there were reports that the Group is working on selling its non-core distribution business and that the group is already in advanced talks with Yas Holdings on this.

“NMC is a strong business operationally and, as shown by our confidence in the three-year business plan, has significant potential. Success in the next phase of the restructuring will allow the group to continue to provide world-class health services to all its patients and underpin the provision of healthcare in the UAE,” Richard Fleming, managing director of Alvarez & Marsal Europe and joint administrator of NMC Health, was quoted as saying in a section of media on Monday.

Talking to this portal, I Unnikrishnan, a financial analyst based in Mumbai, said the creditors coming forward to help the companies out in trouble with additional financing is also in the interest of the financiers, and this could create quite often win-win situations.

NMC June 2019 financials 

The last time NMC Group announced its financials officially was for the first half (H1) ending June 30, 2019, when the company with an equity capital of $1.689 billion reported revenue of $1.236 billion and a first-half profit of $140 million.

The Group had reported June 2019 term loans totalling approximately $1.1 billion, convertible bond liabilities of approximately $400 million, sukuks of approximately $400 million and bank overdrafts and other short-term borrowings of approximately $200 million.

The trouble started with the Muddy Waters Capital, a privately held due diligence based investment firm, issuing a report raising serious concerns about the company’s accounts on December 17, 2019, and another one subsequently on February 10, 2020.

These reports had literally marked the beginning of ‘bad times’ for the company, and the shares of the company had started tanking on London’s market where the holding company was listed.

Before long, the board of the company received an update on March 10, 2020 from its financial adviser that the Group’s debt position was materially above the last reported number as on June 30, 2019, and was estimated to be around $5 billion.

“In addition to $2.1 billion Group debt reported on June 30, 2019, over $2.7 billion in facilities that had previously not been disclosed to or approved by the Board had been identified,” the Administrators had noted in its report in May.

The Board stated at this point that it believed that some proceeds may have been utilised for non-Group purposes.

NMC Health Plc, the London-listed holding company for the hospital group, has gone into administration in April after months of turmoil over its finances.

While application has already been moved for insolvency of the holding company, NMC Health Plc in London where it was listed, its UAE entity is also reported to be considering applying for insolvency under the jurisdiction of Abu Dhabi Global Markets (ADGM).

 

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