Abu Dhabi’s NMC Healthcare takes 2-3 years to demonstrate new owner’s track record

NMC is currently managed by a group of creditors led by ADCB and owes billions of dirhams.

This comes after Alvarez and Marsal, who manage NMC, handed over operational control to a group of creditors. (NMC was founded by BR Shetty in the mid-1970s and over the decades became the largest private healthcare operator in the UAE.)

Now, over the next two to three years, NMC will go through a process of getting stronger and looking for a new owner to bring it into a more secure future. There is also a process of finding ways to return missing billions of dollars and take action against violators.

Gilbert, who served as NMC’s chief financial officer during management, said it would take more time between now and a sale to a new owner than finding one while still in management. “No matter how it performs, there’s always a discount to its value because of concerns about its long-term health,” said Gilbert, head of turnaround and restructuring and co-head of A&M’s Middle East business.

“And (there are) suppliers and customers who are nervous about how and when to get out of management. So giving companies two to three years to build and demonstrate a track record beyond management will realize more value.

“The added value will benefit NMC’s creditors.”

During these two years, NMC has rebuilt its foundations operationally. It has managed to retain key healthcare personnel, continue to expand into skilled nursing and sell non-core interests outside the UAE and Oman. Currently, NMC is a very important system player in the UAE healthcare sector.

“In such a short period of time (less than two years), the region has not undergone a restructuring of the same magnitude or complexity that has allowed the company to move forward and get back to what it does best, which is serving patients,” Gill said. Burt said. “A&M isn’t the only consulting firm involved – it’s a real team with many other legal and financial advisors.”

A&M held an extensive round of talks with NMC creditors, at every point testing what they were doing and options for a way out of the financial entanglement. If the majority of creditors disagree, NMC will have to sell early – akin to fire insurance. In other words, sufficient value cannot be realized.

“We consulted a sophisticated group of creditors throughout. Like us, they are concerned not only with financial results, but also with the health care business inherent in the UAE,” Gilbert said.

After exiting management, “We have a handful of people who are assisting with the handover process, especially the financial and operational elements. However, we have completed and exited most of the work within the company.”

“For example, in my role as interim chief financial officer, once the new board gained control, I handed it over almost immediately. Most of the people I worked with also quit shortly after the brief handover. “Although the executive branch passed the moratorium on Providing space to restructure the group, thus saving the business from a full-blown collapse, it also creates a huge administrative burden. Broadly speaking, the rigor of the court process and the resulting governance requirements — the team put it in a difficult position, so once that burden was lifted, the handover was relatively straightforward.

“Nevertheless, the work of joint administrators, primarily handled by my colleagues in London, continues to deal with litigation matters.”