UAE: NMC admits to more debt as independent review finds fraud

NMC Health Al Zahra Hospital, Sharjah

Disaster continues for troubled private hospital provider NMC Health as it reveals that the true scale of its debt position is materially above the last reported figure. 

This week NMC admitted to more than US$2.7bn in debt previously unknown to the board. This is on top of the US$2.1bn debt reported at 30 June 2019.

An update from the independent review committee of the board said that its review advisers had discovered evidence leading to suspected fraudulent behaviour in relation to some elements of NMC’s previous financial activities.

The news was enough to send the company’s five-year dollar Sukuk into distressed territory. At one point on Wednesday, the 2023s were trading at 24.8 cents in the dollar with a yield that peaked at 59.2% according to Reuters figures.

The US$400m bond priced in November 2018 at 99.787 to yield 5.98%.

Earlier this week HMi reported that NMC has received several serious bids to buy the company from players including Abu Dhabi investment powerhouse Mubadala and Dubai property development company Damac.

Market rumour says that Abu Dhabi-based national health insurance company Daman has stepped in to help NMC Health keep paying salaries and other invoices.

The largest hospital operator in the UAE said it is continuing to work with its advisers to understand the exact nature and quantum of the undisclosed facilities.

‘NMC is fully focused on safeguarding its operational liquidity to continue funding existing operations throughout its various subsidiaries and recently successfully completed the payment of its February payroll,’ it said.

Moelis, PwC and Allen & Overy continue to support the company, including in its discussions with lenders and to assist in providing transparency with respect to its financial position.