ADCB Welcomes Creditor Approval of Debt Restructuring of NMC Group
Abu Dhabi Commercial Bank PJSC (“ADCB” or “the Bank”) welcomes the approval by creditors of NMC Group (“NMC” or “the Company”) 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 US$ 4 billion.
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.
In line with this supportive approach, the Bank participated in the Company’s Administration Funding Facility (“AFF”) to underpin the implementation of the business plan and its restructuring process. In consideration of the participation in the AFF, the participants were granted elevation and conversion rights for an amount equivalent to their respective AFF participation. Following the exercise of these rights ADCB is expected to receive approximately 39% of transferable exit instruments in a new US$2.25 billion facility, a debt claim sized to the expected future value of NMC.
Participants in the exit instruments will receive interest payment for the facility, which will ultimately be repaid from the proceeds generated from a sale of the underlying business at a later stage. There are further possibilities for the participants to benefit from any rise in the valuation of the NMC business as well as any recoveries made by the Company from its ongoing litigation strategies. Given this material progress in restructuring, the Bank considers the provisions and interest in suspense for NMC recorded to date to be at an appropriate level.
As a responsible stakeholder in NMC, ADCB takes a long-term view of its interests in the Company and will continue to take a supportive approach to ensure the provision of high- quality medical care for patients across the region and to maximise value. ADCB will appoint three of the seven non-executive directors that participants in the exit instruments will select.
Abu Dhabi Commercial Bank
ADCB was formed in 1985 and today after integration employs over 3,350 people from over 45 nationalities, serving approximately 590,000 retail customers and over 20,000 wholesale clients. It is the third largest bank in the UAE and second largest in Abu Dhabi by assets, at AED 163.7 billion as at March 31st, 2010.
ADCB is a full-service commercial bank which offers a wide range of products and services such as retail banking, wealth management, private banking, corporate banking, commercial banking, cash management, investment banking, corporate finance, foreign exchange, interest rate, currency, derivative, Islamic products, project finance and property management services.
ADCB is owned 64.8% by the Abu Dhabi Government through the Abu Dhabi Investment Council. Its shares are traded on the Abu Dhabi Securities Market.
ADCB has won the Silver class category of The Sheikh Khalifa Excellence Award (SKEA) for the finance sector in November, 2009. In February 2010, ADCB won The World Finance Corporate Governance Award for “Best Corporate Governance in the UAE” and was recently named “Best Retail Bank in the UAE and GCC 2010” by The Asian Banker magazine in March 2010.