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DUBAI (Reuters) – Troubled hospital operator NMC Health’s entity in the United Arab Emirates (UAE), NMC Healthcare LLC, is considering applying for restructuring and insolvency proceedings locally, two sources familiar with the matter said.
The move comes three months after NMC Health Plc , the London-listed holding company for the hospital group, went into administration in April after months of turmoil over its finances.
The two sources told Reuters that NMC Healthcare LLC was looking at options to file under the jurisdiction of Abu Dhabi Global Markets (ADGM), which has promulgated its own laws relating to insolvency and corporate restructuring.
Such a move would help create a framework for recognition of debt claims while the administrators of NMC Health Plc finalise the scheme of arrangement with creditors, one of the sources said.
A scheme of arrangement is a binding agreement about payment of all, or part of, a firm’s debts over a period of time.
The administrators for NMC Health declined to comment. ADGM did not respond to a Reuters request for comment.
NMC Health is the largest private healthcare provider in the UAE, operating more than 200 facilities including hospitals, clinics and pharmacies.
NMC’s operating entities were unaffected by the appointment of administrators in April and services continued.
That is unlikely to change as UAE authorities are keen to ensure hospital services in the Gulf state are not affected during the COVID-19 pandemic, the second source said.
NMC’s implosion this year amid allegations of fraud and the disclosure of more than $4 billion in hidden debts has left some UAE banks and overseas lenders nursing heavy losses and prompted legal battles to try and recover money owed.
The troubles began in December when short-seller Muddy Waters (NYSE:WAT) raised concerns over the company’s financial statements and were compounded by doubts over the size of stakes of major shareholders, including founder BR Shetty.
