DUBAI: NMC Health, the troubled UAE-based hospitals group, is investigating at least $2.7 billion of new borrowings that have been uncovered by its new team of financial advisers and lawyers amid fears total debts could be considerably higher than $5 billion.
One adviser, who asked not to be named, said: “It’s really difficult to know the bottom of this at the moment. We are uncovering new items all the time.”
In a statement to the London Stock Exchange, where NMC shares were traded until they were suspended last month, the company said that the new borrowings — more than double its previously assumed level of debt — had not been “disclosed to or approved” by its board of directors.
It added that some of the cash “could have been utilized for non-group purposes,” but was still trying to “understand the exact nature and quantum” of the undisclosed facilities.
The revelation that NMC debts may be far higher than the previously disclosed $2 billion, and that there could still be other liabilities so far uncounted, is a major problem for the group as it seeks to continue operating while the UAE and other countries try to get to grips with the coronavirus.
NMC said that it had finally completed salary payments for last month to its 22,000 doctors and other medical staff at 200 facilities in 19 countries. Most of its business is in the UAE, where it accounts for about 30 percent of medical facilities. It also has a presence in Saudi Arabia via a joint venture signed last year as well as hospitals in Jeddah and Al Khobar.
“NMC is fully focused on safeguarding its operational liquidity to continue funding existing operations,” it added.
The business, founded by Indian entrepreneur BR Shetty in the 1970s, got into trouble last December when a report from US activist investor Muddy Waters alleged financial irregularities on a large scale.
NMC denied the allegations in the report, but the shares collapsed as further revelations emerged about over-valuation of assets, levels of debt and related party transactions.
In addition to Shetty, two UAE entrepreneurs — Khaleefa Butti Omair Al-Muhairi and Saeed Mohamed Butti Mohamed Khalfan Al-Qebaisi — controlled the company after it listed shares in London in 2012.
Advisers to Shetty said that he was in India on urgent family business, but was expected to return to the UAE when that was concluded.
The higher-than-expected level of debt will cloud attempts by the Abu Dhabi authorities to find a buyer for the business.