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25 March 2020

NMC Health’s debt now estimated to be around $6.6 billion

The hospital operator’s debt is higher than the $5 billion reported earlier this month and substantially higher than the $2.1 billion last declared in its accounts

NMC Health has been in freefall since December 2019, when short-seller Muddy Waters Capital alleged it had overpaid for assets/Bloomberg

by Kudakwashe Muzoriwa

The board of NMC Health said that the company’s debt is currently estimated to be around $6.6 billion, including the $360 million convertible bond and $400 million Sukuk.

NMC Health stated that the hospital operator’s bilateral and syndicated debt obligations comprise of over 75 debt facilities from over 80 financial institutions and work on verifying the outstanding debt obligations is continuing.

The board believes that some of the proceeds may have been utilised for non-group purposes and the company has commenced a project to trace such proceeds to consider what actions may be available to recover such monies.

NMC Health said that it is still working with its advisers to understand the exact nature and quantum of the undisclosed facilities, including the circumstances in which they were obtained.

Furthermore, NMC Health said that there are cheques that were written by group companies and may have been used as security for financing arrangements for the benefit of third parties. The amount of these cheques is estimated to be around $50 million.

“The existence of these cheques has only recently been brought to the attention of the board and urgent investigations are ongoing,” said NMC Health.

NMC Health has appointed Matthew J. Wilde as the company's Chief Restructuring Officer. Wilde has worked on restructurings with some of the region’s largest companies such as Al Jaber Group, Dubai World, DryDocks World and Carillion in recent years, both as an independent practitioner and as a restructuring partner at PwC.

The company also said Prasanth Shenoy has resigned as Chief Financial Officer with immediate effect following a period of extended leave for ill health. NMC Health has appointed a director of finance from internal resources and PwC will continue to support the finance function. The company said that it will progress the appointment of a new chief financial officer in due course.

In January 2020, NMC Health appointed former US Federal Bureau of Investigation Director Louis Freeh to lead a review, which reported the evidence of fraud.

NMC Health has been in freefall since December 2019, when short-seller Muddy Waters Capital alleged it had overpaid for assets, inflated cash balances and understated debt. The shares, listed on London Stock Exchange, were suspended in February 2020 and the company fell out of the FTSE 100 this month.

RELATED STORIES: Muddy Waters Capital Matthew J. Wilde NMC Health





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