UAE’s NMC Healthcare announces launch of administration exit process

UAE’s NMC Healthcare has announced the launch of its administration exit process.

Joint administrators have proposed deeds of company arrangement (DOCA), which will allow NMC companies to exit administration and continue to operate the core business of the group. To this end, the proposed DOCAs will compromise the DOCA companies unsecured debts in exchange for unsecured creditors receiving equity-like interests in a new NMC group, a statement said.

The shares of the DOCA companies other than NMC Healthcare LTD (in administration) (‘LTD’) and substantially all the assets of LTD will be transferred to the new NMC group. LTD itself will remain in administration to pursue certain potential litigation claims on behalf of itself and the other DOCA companies, any proceeds of which will be distributed to the relevant creditors, according to the terms of the DOCAs.

A meet for creditors to vote on the proposed DOCAs will be held on September 1, 2021, who may also vote via proxy. Once confirmed by the ADGM courts, the implementation is anticipated to take between 3-5 months to complete the transfer of shares and assets of the DOCA companies as well as obtaining clearance from the appropriate government entities.

Meanwhile, NMC Healthcare has reported EBITDA (earnings before interest, tax, depreciation and amortisation) worth $103.9m during the first half of 2021.

The reported EBITDA, which was 50 per cent ahead of the business plan budgeted at $69.3m, was attributed to performance improvement initiatives – including workforce and operational efficiency improvements centrally as well as procurement savings across several areas, the statement said.

Gross revenues for NMC’s UAE and Oman business stood at $611m. Meanwhile, the number of patient encounters across the group grew to 4.4 million year-to-date, compared to 2.4 million patient encounters last year. Additionally, to support the country’s Covid-19 response, the group administered 98,919 vaccinations and 1.7million PCR tests in H1.

In April, NMC Healthcare PLC and NMC Healthcare LTD announced the completion of the sale of Eugin (Luarmia and Boston IVF) to Fresenius Helios for an enterprise value of EUR430m (approximately $525m).

Michael Davis, chief executive officer said: “Over the past 18 months, we worked with our stakeholders and partners to stabilise the group’s financial position and improved operations, saving over $2bn of value in the process. But more importantly, I’m tremendously proud of the contribution that our 12,000 clinicians and support staff make to their communities across the UAE every day. As we return to normalized capacity levels, I am excited to explore the true potential of NMC Healthcare across our multi-specialty portfolio.”

“We have worked closely with NMC Healthcare’s stakeholders on a long-term approach that will deliver maximum returns to creditors while ensuring NMC’s survival as value-generating going concern,” added Richard Fleming, managing director of Alvarez & Marsal Europe LLP and Joint Administrator of NMC PLC and NMC Healthcare. “The deeds of company arrangement (DOCA) provide the best and most appropriate mechanism to both secure NMC’s position to delivery first-class patient care, while enabling the group to continue its restructuring and performance improvement programme.”

“I am greatly looking forward to chairing the meetings on September 1 as the next step to delivering the purpose of the administration: to return 34 companies to full operation as going concerns.”