Debt-Ridden NMC Health to Delist From London Stock Exchange

Published April 28th, 2020 - 08:00 GMT
Debt-Ridden NMC Health to Delist From London Stock Exchange
UAE Central Bank had frozen the personal and business assets of some former directors of NMC could not be corroborated. (Shutterstock)
Highlights
Its fall from grace followed the publication of damaging allegations about financial irregularities.

NMC Health, the UAE’s biggest medical services provider, has asked the London Stock Exchange to delist its shares, in the latest blow to the troubled company.

Richard Fleming, whose consulting firm Alvarez & Marsal was appointed joint administrator to NMC earlier this month, said delisting the shares was the “logical next step” after it replaced the entire board of the debt-laden holding company.

NMC said in a statement: “Continued listing of the shares in NMC Health incurs significant cost and adds complexity in a situation where decisions need to be made quickly in partnership with the group’s stakeholders. Against this backdrop, the administrators have concluded that delisting NMC Health’s shares is appropriate.”

It added: “The operating entities are unaffected by the delisting. NMC’s hospitals, medical centers, care facilities, and other operations in the group continue to operate, under existing management, with patients continuing to be treated as they are currently.”

After it floated shares in London in 2012, NMC was one of the market’s best-performing stocks and made its way into the FTSE100 list of top companies, enriching the original investors.

Its fall from grace followed the publication in December of damaging allegations from activist investor Muddy Waters about financial irregularities at NMC, which later crystallized into a fraud investigation. Its London shares were suspended in February.

HIGHLIGHT

Abu Dhabi Commercial Bank, the biggest creditor with nearly $1 billion owed, has opened criminal proceedings against unspecified individuals in relation to their dealings at NMC. Other big UAE and international banks are also on the creditor list.

Reports that the UAE Central Bank had frozen the personal and business assets of some former directors of NMC could not be corroborated.

Abu Dhabi Commercial Bank, the biggest creditor with nearly $1 billion owed, has opened criminal proceedings against unspecified individuals in relation to their dealings at NMC. Other big UAE and international banks are also on the creditor list. Reports that the UAE Central Bank had frozen the personal and business assets of some former directors of NMC could not be corroborated.

Delisting virtually wipes out the value of the shares and leaves NMC shareholders with little say over the future of the company.

They are last in the queue to recoup anything from the company — after creditors, preferential shareholders and some employees — in the form of payment from the administration process.

While there is little that shareholders can do beyond trying to sell their shares privately, the scandal likely leaves them angry that their once-profitable investment could be wiped out in a matter of months.

There are several big institutional investors on the NMC register, and at least one American law firm — Philadelphia-based Berger Montague — has begun to organize a class action legal case on behalf of aggrieved shareholders.

Fleming said: “We are working at pace to ensure continuity of patient care, stability for staff and suppliers, and financial security for NMC’s operating companies.”

It is believed that some operations deemed non-essential amid the coronavirus pandemic have been halted, but that staff salaries have been paid up to date.

Before the financial crisis that has engulfed the company, NMC had 2,000 doctors and 20,000 nursing and support staff in 200 facilities worldwide.

Last year, it signed a joint venture with the Saudi Arabian General Organization for Social Insurance to operate medical facilities in the Kingdom.


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