Growing NMC troubles may land section of staff in Aster

Aster Healthcare plans to sell idle land assets in India

KOCHI: Will Aster DM Healthcare stand to benefit from the troubles the UAE’s largest private sector health provider, NMC Healthcare Group, is now going through?

The crucial question is whether Aster, which plays the second fiddle only to NMC in the UAE’s private sector healthcare industry, would be willing to absorb the hundreds of highly experienced and talented doctors, nurses and other senior medical professionals readying to switch loyalties in the wake of the smouldering discomfort in the NMC group.

Responding to a specific query from an analyst on whether Aster DM Healthcare would view the current scenario that NMC is embroiled in as an opportunity, the chairman and managing director of the group, Dr Azad Moopen, said his company may be able to make offers to the good workforce planning to leave the NMC Group in the aftermath of the unfortunate developments there.

Stating that he is really sad for what is happening in NMC Healthcare, Dr Moopen said these incidents are reminders to the industry on the need to imbibe corporate governance and good practices in businesses, especially in healthcare sector.

“The NMC picture is not fully clear yet, we don’t want to jump into hiring people from NMC right now…issues are at a very preliminary stage and hence we don’t want to make more comments on the same,” he added.

The resignation of the NMC Healthcare founder, BR Shetty, a few days ago as its co-chairman, now has been viewed as the proverbial ‘last nail’.

Briefing analysts on the financial performance and future plans of Aster DM Healthcare, Dr Moopen said, the company is seriously weighing the option of selling its idle land assets in India to reduce debt and thus boost its balance sheet.

The company has also plans to raise $350 million-$400 million  through issue of five-year dollar bonds to help reduce company’s debt. The Indian standalone operations have an accumulated loss to the tune of Rs200 crore, which is indeed an irritant that stands in the way of dividend distribution, said a top official of Aster,

While the Indian operations sit on a net debt of Rs350 crore as on December 31, 2019, the GCC operations that still account for bulk of the group’s operations, carry a net debt of about Rs2400 crore ($342 million).

Aster Healthcare has recently got approval from the Dubai authorities to acquire 100 per cent legal ownership of the business in the emirate and the process is expected to be completed during the current financial year itself.

“We are hopeful that sooner than later, all other emirates in the UAE also will fall in line to have the same framework, whereby we will be able to enjoy full legal ownership of our businesses there,” Aster CMD expressed hope

While the group is in control of 97 per cent legal ownership in Saudi Arabia, in Oman it is 70 per cent, whereas Bahrain already allows 100 per cent legal ownership with Qatar still following the 51:49 model in favour of local ownership.

Dr Moopen said Aster healthcare group, which has been strengthening its presence in India for the past couple of years, is busy diversifying into other related areas such as home care and running dedicated labs.

In Abu Dhabi, the group has already acquired an existing homecare business, which happens to be one of the top players there. “The philosophy of the group is to gradually move to asset-light model and improve the return on equity (ROE),” said the finance head.

 

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