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NMC Health

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NMC Health
Company typePublic
LSE: NMC
(Suspended as of 9 April 2020)
IndustryHealth
Founded1974
FounderB. R. Shetty
HeadquartersAbu Dhabi, United Arab Emirates
Key people
    • David Hadley (CEO)
RevenueIncrease $2,057.3 million (2018)[1]
Increase $379.8 million (2018)[1]
Increase $251.9 million (2018)[1]
Number of employees
c.18,000 (2018)[1]
Websitewww.nmchealth.com

NMC Health (Arabic: مستشفى المركز الطبي الجديد) is a healthcare chain and distribution business in the United Arab Emirates (UAE). The company is headquartered in Abu Dhabi and has branch offices in Dubai, Ajman, Al Ain and Northern Emirates. The company operates and manages over 200 facilities in 19 countries.[2]

The company was accused in 2019 of understating debt on its balance sheet and later revealed that debt of US$2.7 billion had not been reported.[3][4]

On 8 April 2020, NMC was placed into administration by UK High Court judge Sebastian Prentis due to the insolvency of the company caused by frauds alleged to have been committed by the founder and chairman of the board B. R. Shetty.[5][6]

In 2023 the UK Financial Conduct Authority (FCA) censured the company for committing market abuse by understating its debts by as much as $4bn. No fine was issued as the business was not expected to have any funds left after paying debts.[7]

History

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NMC Health was founded by B. R. Shetty in 1974 as the New Medical Centre in Abu Dhabi.[8] In 1981, a new marketing & distribution division, NMC Trading was launched, which distributed medicines to pharmacies in the UAE. This division would later expand into distribution of fast-moving consumer goods, medical equipments and supplies and educational products.[9]

From 1996, NMC began expanding to other emirates, setting up the NMC Clinic in Sharjah (1996), NMC Hospital, Deira, Dubai (1999), the NMC Specialty Hospital, Dubai (2004) and NMC Specialty Hospital in Al Ain (2008). In 2009, these hospitals were awarded the JCIA accreditation.[10] In April 2012, NMC listed on the London Stock Exchange.[11][12] That same year, NMC began managing operations at the Shiekh Khalifa General Hospital in Umm Al Quwain, acquired the BR Medical Suites in Dubai Healthcare City and continued their expansion with the addition of new medical setups such as NMC Royal Hospital in Khalifa City[13] and operations in Al Ain's industrial area.[14] In 2013, the company added a day-surgery centre in Mohammed Bin Zayed City in Abu Dhabi. NMC Health opened the NMC Hospital in Dubai Investments Park, NMC Brightpoint Royal Women's Hospital, and the NMC Medical Centre in Al Ain in 2014.[10]

NMC Health acquired the Spain-based Clínica Eugin in 2015, allowing the company to become the leading integrated women's health provider from fertility through obstetrics and pediatrics in the UAE.[15] That same year, the company also acquired UAE based medical groups, Dr. Sunny Healthcare Group (leading set of medical clinics in Sharjah and Northern Emirates), Provita and Americare Group, Abu Dhabi (focused on long-term care and rehabilitation)[16] and acquired a 51% stake in Fakih IVF, another leading fertility clinic in UAE.[17]

In August 2016, the company expanded its operations into Saudi Arabia when it acquired a 70 percent stake in As Salama Hospital in Al Khobar; NMC Health also invested in a project to build a 120-bed care centre in Jeddah that will be managed by its subsidiary Provita.[18][19] In December 2016, NMC Health announced the acquisition of Al Zahra Hospital, one of the largest private hospitals in the UAE.[20] In 2017 Emirates Healthcare, owned by Abu Dhabi investment group KBBO, announced the signing of an operating and management contract with NMC Health for the management of their Emirates Healthcare assets.[21] NMC Health bought Aspen Healthcare for £10 million in August 2018.[22]

Under-reporting of debt

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In December 2019, short-seller Muddy Waters questioned the company's statement of accounts, concerned that NMC had "manipulated its balance sheet to understate debt" and contained statements which were "hallmarks of significant fraud".[23][24]

In February 2020, Executive Vice Chairman Khalifa Butti Omeir Bin Yousef resigned from NMC. The company said a legal review was being undertaken to verify the total interests of some of its shareholders over concerns they have been incorrectly reported.[25] Later in the month shares in the company were suspended from trading amid concerns that debt had been under-reported: the Financial Conduct Authority (FCA) announced an investigation.[26]

Also in February 2020, as per the regulatory fillings to the London Stock Exchange, the company disclosed about the "highly preliminary approaches" made by the private equity groups Kohlberg Kravis Roberts and Switzerland-based GK Investment for possible buyout.[27][28][29] However, Kohlberg Kravis Roberts withdrew by 11 February 2020,[30] and GK Investment withdrew by the end of February.[31]

In March 2020 the company reported that:[3][4]

it has identified over $2.7 billion in facilities that had previously not been disclosed to or approved by the Board ... The Board believes that some proceeds may have been utilised for non-Group purposes.

This meant that the actual indebtedness was not $2.1 billion as previously reported but circa $5 billion as at 30 June 2019.[32] On 24 March 2020 the total debt was then estimated at $6.6 billion.[33] Many employees were not paid at that time.[34]

On 8 April 2020, NMC went into administration in the UK due to the insolvency of the company due to alleged frauds committed by founder and then-chairman of the board B.R. Shetty.[6] Consequent to the request from the board of directors of NMC and on going investigation of potential financial irregularities, the company was suspended from its listing on the London Stock Exchange.[35]

On 15 April 2020, Abu Dhabi Commercial Bank filed a criminal complaint against NMC Health with the Attorney General's Office of UAE.[36]

In April 2021, HSBC and Standard Chartered cleared around $370M worth of positions in NMC's debt in two separate auctions as more information about likely restructuring recoveries become available.[37]

In 2023 the UK FCA censured the company for committing market abuse by understating its debts by as much as $4bn. No fine was issued as the business was not expected to have any funds left after paying debts.[7]

Operations

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NMC Health operates two business segments, healthcare distribution and services. The healthcare arm operates an international network of hospitals around the UAE and Europe. It is the largest private healthcare provider in the UAE and provides medical services including diagnostics, outpatient clinics, gynecology, obstetrics, human reproduction and pharmacy retail.[38] In 2017, it operated more than 45 locations and more than 15 pharmacies, and employed over 1,200 doctors who saw more than 11,000 patients daily.[39][40] NMC Health's distribution and services arm operates the subsidiary, NMC Trading, which engages in wholesale trading of pharmaceuticals, medical equipment, food and cosmetics.[41] NMC Trading has distribution rights for companies such as, Nestlé, Pfizer, Siemens, Samsung, Sanofi and Henkel.[39]

Recognition

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NMC Health has been recognized as one of the UAE's strongest brands by the Superbrands Council since 2015. That same year, the company received the Frost & Sullivan Middle East Integrated Healthcare Company of the Year Award and a Sheikh Khalifa excellence award amongst others.[42] The company was recognized for best practices in corporate social responsibility by the Dubai Chamber of Commerce and Industry in 2016.[43] That same year, NMC Health received Stevie Awards in the Company of the Year in the Health Products and Services and Pharmaceuticals category and people's choice for favorite companies.[44] In 2017, NMC Specialty Hospital and NMC Trading both received Mohammed bin Rashid Al Maktoum Business Excellence Awards.[45] It has been selected by the Abu Dhabi National Oil Company (ADNOC) to manage operations of Ruwais Hospital in the Al Dhafra region.[46][47]

References

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  1. ^ a b c d "NMC Health plc Annual Report and Accounts 2018" (PDF). NMC Health. Archived (PDF) from the original on 26 December 2019. Retrieved 26 December 2019.
  2. ^ "NMC Health spreads its wings across Muscat to Al Hail". Zawya. Archived from the original on 24 December 2019. Retrieved 24 December 2019.
  3. ^ a b "UPDATE 1-NMC Health identifies over $2.7 bln in undisclosed debt". Reuters. 2020-03-10. Retrieved 2020-05-04.
  4. ^ a b "NMC Health PLC - Update on financial position". FT.com. 10 March 2020. Retrieved 10 March 2020.
  5. ^ "NMC Health Placed Into Administration by U.K. Court". BloombergQuint. Retrieved 2020-05-04.
  6. ^ a b "NMC Heads to Administration After Giving In to Creditor Demands". Reuters. Archived from the original on 11 April 2020. Retrieved 15 April 2020.
  7. ^ a b "Collapsed hospital operator NMC Health misled markets over £3.2bn of debt, says watchdog". The Guardian. PA Media. 17 November 2023.
  8. ^ Focus on quality medical service for all Archived 2008-06-04 at the Wayback Machine. Gulfnews.com article on BR Shetty.
  9. ^ "NMC Trading wins Nivea award". Trade Arabia. 21 April 2008. Archived from the original on 12 March 2018. Retrieved 11 March 2018.
  10. ^ a b "New Medical Center UAE | NMC Healthcare Milestones United Arab Emirates". NMC. Archived from the original on 2016-03-24. Retrieved 2016-02-28.
  11. ^ UAE-based NMC Health plans London IPO Archived 2015-09-29 at the Wayback Machine London and South East, 8 March 2012
  12. ^ Wigglesworth, Robin (April 2, 2012). "UAE Health Group Raises £117m in London IPO". Financial Times. Archived from the original on August 5, 2017. Retrieved August 4, 2017.
  13. ^ "$200 Million NMC Royal Hospital Opens in Abu Dhabi". Emirates 24/7. 7 March 2016. Archived from the original on 26 February 2017. Retrieved 9 November 2016.
  14. ^ "NMC to expand health division with new hospital in Al Ain". The National. 21 August 2013. Archived from the original on 22 April 2016. Retrieved 10 April 2016.
  15. ^ "NMC Health PLC announces the acquisition of leading global fertility centre". London Stock Exchange. Archived from the original on 28 September 2015. Retrieved 5 August 2015.
  16. ^ "NMC spends almost $100 million to acquire two new health groups | The National". www.thenational.ae. 29 April 2015. Archived from the original on 2016-03-05. Retrieved 2016-02-28.
  17. ^ "NMC taps UAE fertility market with 51% stake in Fakih IVF Group | The National". www.thenational.ae. 24 November 2015. Archived from the original on 2016-03-04. Retrieved 2016-02-28.
  18. ^ Sahoo, Sananda (29 August 2016). "Abu Dhabi-Based NMC Health Invests $32 Million In Saudi Healthcare Projects". The National. Archived from the original on 3 November 2016. Retrieved 9 November 2016.
  19. ^ Bradshaw, Julia (30 August 2016). "Emirati Hospital Group NMC Enters Lucrative Saudi Arabian Healthcare Market". The Telegraph. Archived from the original on 3 September 2016. Retrieved 9 November 2016.
  20. ^ Everington, John (14 December 2016). "NMC Health Makes Offer for Al Zahra Hospital". The National. Archived from the original on 28 April 2017. Retrieved 10 April 2017.
  21. ^ "NMC Health to operate and manage Emirates Healthcare assets". Gulf News. 24 August 2017. Archived from the original on 19 December 2019. Retrieved 28 February 2020.
  22. ^ "NMC Health books into British hospitals with £10m acquisition of Aspen Healthcare". The Times. 21 August 2018. Archived from the original on 21 August 2018. Retrieved 6 November 2018.
  23. ^ "MW is Short NMC Health plc (NMC.LN)". Muddy Waters. 17 December 2019. Archived from the original on 1 March 2020. Retrieved 10 March 2020.
  24. ^ Bryant, Chris (March 11, 2020). "If Muddy Waters is Shocked, You've Really Been Bad". www.bloomberg.com. Archived from the original on March 13, 2020. Retrieved 2020-03-11.
  25. ^ Marchese, Adriano (2020-02-14). "NMC executive vice chairman resigns". MarketWatch. Archived from the original on 2020-02-28.
  26. ^ "Watchdog opens NMC Health inquiry amid accounting scandal". The Guardian. 27 February 2020. Archived from the original on 29 February 2020. Retrieved 29 February 2020.
  27. ^ "NMC Health Gets Preliminary Approaches From KKR, GKI; Sees FY Results In-line". Markets Insider. RTTNews. 10 February 2020.
  28. ^ Marchese, Adriano (2020-02-10). "NMC Health confirms bid approaches from KKR & Co. and GK Investment Holding". MarketWatch.
  29. ^ "KKR and GK Investment prepare bids for under-fire NMC Health". The National. 10 February 2020. Retrieved 2020-05-04.
  30. ^ "KKR rules out offer for NMC, Italian-backed group confirms interest". Reuters. 2020-02-11. Retrieved 2020-05-04.
  31. ^ Machado, Samantha. "GKSD Investment walks away from offer for NMC Health". www.nasdaq.com. Retrieved 2020-05-04.
  32. ^ "Debt levels said to soar to $5bn at troubled NMC Health". Arabian Business. 10 March 2020. Archived from the original on 11 April 2020. Retrieved 10 March 2020.
  33. ^ "NMC's debt now estimated to be $6.6bn". The National. 24 March 2020. Retrieved 2020-04-16.
  34. ^ "UAE: NMC Health employees go unpaid as co. faces financial investigation". Business and Human Rights Resource Centre. 5 March 2020. Retrieved 16 March 2022.
  35. ^ "NMC Health (UK): Continued Suspension - Update". FTSE Russell. Archived from the original on 22 April 2020. Retrieved 15 April 2020.
  36. ^ "ADCB files criminal complaint against individuals over NMC Health". Reuters. 2020-04-15. Archived from the original on 2020-04-15. Retrieved 2020-04-16.
  37. ^ "UPDATE 1: HSBC, Standard Chartered Sell About $370M of NMC Debt; HSBC Sells $20M Block of AFF Above Par; Unsecured Debt Trades in Teens to Low 20s Range". Reorg. 2021-04-01. Retrieved 2021-04-06.
  38. ^ "NMC Health PLC". Reuters. Archived from the original on August 5, 2017. Retrieved February 16, 2017.
  39. ^ a b "NMC Healthcare in 10 Facts". Middle East Business Review. 31 August 2016. Retrieved 16 February 2017.
  40. ^ Townsend, Sarah (17 July 2017). "UAE's NMC Health Eyes 25% Growth in 2017, Says New CEO". Arabian Business. Archived from the original on 17 July 2017. Retrieved 18 July 2017.
  41. ^ "NMC Health PLC". The Wall Street Journal. Archived from the original on August 5, 2017. Retrieved February 16, 2017.
  42. ^ "SKEA Winners". Sheikh Khalifa Excellence Award. Archived from the original on December 2, 2016. Retrieved November 28, 2016.
  43. ^ "NMC Specialty Hospital-Dubai Has Won the Prestigious Dubai Chamber CSR Label-2016". NMC Health. 26 October 2016. Archived from the original on 30 March 2017. Retrieved 9 November 2016.
  44. ^ "2016 Stevie Award Winners". The International Business Awards. Retrieved 17 November 2023. [failed verification]
  45. ^ Diaa, Sarah (21 February 2017). "Mohammad Bin Rashid Business Award Winners Announced". Gulf News. Archived from the original on 16 April 2017. Retrieved 11 April 2017.
  46. ^ "Adnoc awards Ruwais Hospital operations to NMC Healthcare". Gulf News. March 1, 2018. Archived from the original on March 6, 2018. Retrieved March 6, 2018.
  47. ^ "ADNOC picks UAE healthcare operator to run Ruwais Hospital". Arabian Business. 1 Mar 2018. Archived from the original on 6 March 2018. Retrieved 6 March 2018.
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