The High Court in the United Kingdom announced on Thursday that it has appointed joint administrators to NMC Health, following an application by Abu Dhabi Commercial Bank, which has an exposure to the troubled healthcare provider to the tune of Dh3 billion
"NMC has conceded to the ruling," ADCB said in a filing at Abu Dhabi Securities exchange on Thursday.
"ADCB and other key creditors have concluded that an administration process is the most suitable route to ensure a rescue and turnaround of NMC Health PLC and its, and to assure continuity of operations for patients, healthcare workers and other stakeholders," it said.
"An administration is a process designed for a rapid business recovery and is therefore distinct from liquidation. This proactive approach to place the Group in administration was taken in response to recent developments, including the revelation of previously undisclosed liabilities of over $4 billion, which suggests a significant risk of insolvency," said the lender.
ADCB said NMC might have concealed material information from creditors, shareholders, rating agencies and regulators. It also recently disclosed suspected fraudulent activity, which has impacted the group's financial position and the interests of ADCB and other key stakeholders.
"ADCB's filing for the appointment of joint administrators has received support from a number of key creditors. Creditors have been particularly concerned about the group's liquidity and that former members of the board and senior management team still retained influential positions within NMC despite the disclosure of the suspected fraudulent activities."
On Wednesday, NMC, which hasa market value of $2.4 billion and total debt of $6.6 billion, said it was not in a position to contest the petition filed by ADCB at the London high court seeking to place the embattled firm under a court- appointed administration as the debt- ridden company undergoes an investigation by the UK's Financial Conduct Authority.
The joint administrators from turnaround advisory firm Alvarez & Marsal will take immediate control of NMC Health and will work on behalf of all stakeholders, ADCB said.
The move came following weeks of uncertainty relating to London-listed NMC's debt levels and undisclosed shareholder dealings.
NMC, UAE's biggest private hospital group, has seen its stock more than halve in value since December after short-seller Muddy Waters questioned its financial statements.
On Wednesday, NMC's recently appointed executive chairman Faisal Belhoul, conceding the possibility of administration, said "realising regrettably that administration has become a certain outcome, I must now underscore that it is critical that the administration process is conducted quickly and smoothly.
"The continuity of the executive leadership must also be maintained. This measure will ensure that the highest operating standards and quality of care continue to be delivered in this time of great need; and increase the chances that our hardworking doctors and healthcare professionals on the front line have the supplies they need and are fully supported in their duties," Belhoul said.
"In light of this decision, banks and creditors involved in the administration process have a clear and pressing duty to extend credit lines and ensure that the company has the necessary liquidity to maintain healthcare operations and must continue to support the salaries of thousands of healthcare workers at this time," Belhoul said.