Troubled FTSE 100 healthcare company NMC, which suspended trading in its shares following the discovery of accounting irregularities earlier this year, has gone into administration following action by a major creditor, which has also brought a criminal legal challenge
Alvarez & Marsal administrators to ailing NMC healthcare group
Richard Fleming, Mark Firmin and Ben Cairns of Alvarez & Marsal Europe have been appointed joint administrators of Abu Dhabi-based NMC, which was listed on the London stock exchange in 2012 and entered the FTSE 100 list in September 2017.
In February the company uncovered $335m (£258m) in previously undisclosed loans to related parties, and a further investigation by PwC unearthed over $2.7bn (£2bn) in undisclosed debt.
The administration came in response to a petition presented by Abu Dhabi Commercial Bank (ADCB), one of NMC’s largest creditors. It relates to NMC Health, which is the holding company of the largest private healthcare group in the UAE, with operations both there and in 19 other countries.
The operating entities are unaffected by the administrators’ appointment. NMC’s hospitals, medical centres, care facilities and other operations in the group will continue to operate, under existing management, with patients continuing to be treated as they are currently.
Richard Fleming, managing director of Alvarez & Marsal Europe and joint administrator of NMC Health, said: ‘I want to start by recognising the extraordinary commitment and dedication that NMC’s doctors, nurses, critical care workers and other employees have demonstrated over recent months, and particularly as the world responds to the COVID-19 pandemic.
‘All hospitals, medical centres, care facilities and other operations in the group are not subject to the administration procedure, so their current activities will not change.
‘We believe that this move, combined with our planned changes to NMC’s governance, is the best way to ensure stability and continued patient care at this difficult time.’
Separately, ABCD put out a statement stating: ‘ADCB confirms that it has initiated criminal legal proceeding with the Attorney General in Abu Dhabi against a number of individuals in relation to NMC Health Group.
‘This action is consistent with the bank’s objective to protect its interests.
‘ADCB continues to work closely with other creditors and the joint administrators to ensure continuity of NMC Health’s operations and a rapid recovery of the business.’
The administrators have replaced the NMC board, stating that an immediate priority is to implement corporate governance changes in the group.
There are four new non-executive directors: Eli Chahin, former senior advisor with AlixPartners; Christopher Hall, who is the managing partner of Oxford Investment Consultants; Myles Halley, who is the former head of KPMG’s restructuring practice in Australia; and Philip Gore-Randall, former global COO of Arthur Andersen.
ADCB is also chairing a newly formed coordinating committee which will act as the primary contact between the company and its debtors, and includes other significant creditors, including Abu Dhabi Islamic Bank, Dubai Islamic Bank, Barclays and Standard Chartered.
In February, the Financial Conduct Authority launched an investigation into NMC's activities after the company's shares were suspended from trading on the London Stock Exchange.
By Pat Sweet