Yahoo Finance Battle for control of scandal-hit hospital operator NMC Health
Troubled London-listed hospital company NMC Health is fighting an attempt by one of its largest lenders to force the company into administration.
The BBC reported on Sunday that Abu Dhabi Commercial Bank (ADCB) has applied to the UK’s High Court to forcibly appoint administrators to NMC Health.
ADCB has lent $981m (£800m) to NMC Health and said it wanted to safeguard the company’s future, according to the BBC report.
NMC Health said on Monday it was holding talks with ADCB and other creditors to try and have the High Court application withdrawn. NMC said it did not think the process would be “in the interests of stakeholders as a whole”.
NMC said any resolution to creditor concerns would likely “involve material changes to corporate governance of the group and the composition of the Board itself.”
If the company can’t convince creditors to withdraw the resolution, the High Court will decide on the application on Thursday 9 April.
The struggle with lenders comes after months of turmoil and scandal at the company, which operates around 200 hospitals in the Middle East and distributes medical supplies in the region.
US short seller Muddy Waters raised questions about the company’s true level of debt in December. NMC vigorously denied the allegations and hired a former FBI director to investigate the claims.
However, the stock was suspended in February after the investigation turned up inconsistencies in its finances and the UK’s Financial Conduct Authority (FCA) opened an investigation into the business. Shares had lost over 60% of their value by the time trading was halted.
Last month, NMC said investigators had discovered $2.7bn of undisclosed debt, more than double what the company had previously announced. Other inconsistencies have also been discovered and the company has had trouble clarifying the ownership of shares among key investors.
NMC Health’s management have largely been cleared out since the start of the year as it struggles to repair the damage. Shares in the former FTSE 100 company remain suspended.
