NMC ‘wants to exit Saudi venture’

NMC is facing regulatory and legal actions in several jurisdictions. (Supplied)
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Updated 30 August 2020

NMC ‘wants to exit Saudi venture’

  • The hospitals company’s operation in the Kingdom is currently held via the Tadawul-listed company CARE

DUBAI: Administrators to NMC Health, the fraud-stricken UAE-based hospitals company, are looking for buyers of its Saudi Arabian business launched last year.

Alvarez & Marsal, the firm appointed to oversee the future of NMC assets following its collapse with a total of $6.6 billion of debts, told creditors in a recent presentation that the Saudi business and some other international operations were regarded as “non-core,” and that it was examining options to sell.

The Saudi operation was formally launched last year in a joint venture with the Kingdom’s General Organization for Social Insurance that involved a swap of assets and cash. The venture is currently held via the Tadawul-listed company CARE.

The administrators told creditors that they were looking to exit the joint venture to raise cash as part of the restructuring of NMC.

The presentation said: “The recommendation is to explore the potential of engaging with GOSI (the General Organization for Social Insurance) for the purchase of the company’s interest and/or a capital markets solution, such as reversing the Saudi joint venture into CARE.

“However, any decision would have to be considered in light of the potential underlying value of the business, especially as NMC is not a forced seller of the business,” it added.

A spokesman for NMC confirmed that it was looking to exit the Saudi joint venture, but said that discussions with potential buyers had not begun.

Among NMC assets is a 53 percent stake in Saudi Medical Care Group, which in turn owns 49 percent of CARE, giving NMC an effective interest of 26 percent in the Tadawul-listed company.

NMC’s Saudi ventures so far have avoided any taint from the damaging revelations about NMC, which is facing regulatory and legal actions in several jurisdictions as investigators seek to piece together what happened to more than $4 billion of unauthorized bank lending that forced the downfall of the once multibillion-dollar company.

Marija Simovic, Alvarez managing director, said last week that the firm had uncovered “most” of the hidden debts that led to its collapse.

“Do we believe a majority of it has been identified? Yes. Is it 100 percent? No,” she told Bloomberg.

Teams of investigators from the UK, where NMC was listed on the London Stock Exchange, as well as in the UAE and other jurisdictions, are investigating financial records of NMC to trace the missing funds.

As part of the creditors’ presentation, Alvarez gave a verbal update on the forensic investigations into illegal bank borrowings, which has not been made public.

Analysts at investment bank Arqaam Capital said the decision by NMC to exit the joint venture could lead to takeover interest in CARE, listed on the Tadawul with a market capitalization of SR2.3 billion ($613.3 million), and named Saudi health groups Al-Hammad Medical and Mouwasat Medical Services as potential buyers.

CARE has a resilient balance sheet, with ample cash and low borrowings, and a “healthy growth profile,” Arqaam said.

NMC, the UAE’s leading health care provider, was founded in the 1970s by Indian entrepreneur BR Shetty and run before its collapse by CEO Prasanth Manghat.


Australian watchdog considers its own Google antitrust case

Updated 1 min 7 sec ago

Australian watchdog considers its own Google antitrust case

  • Competition and Consumer Commission launched Australian court action against Google in July
CANBERRA, Australia: Australia’s competition watchdog will consider its own antitrust case against Google, the commission chairman said Wednesday after the US Justice Department sued the company for abusing its dominance in online search and advertising.
Competition and Consumer Commission chairman Rod Sims described the US case filed Tuesday as one of the world’s biggest antitrust cases in the past 20 years.
“I’m delighted the D.o.J.’s taking it on and we’ll follow it really closely,” Sims told the National Press Club, referring to the US Department of Justice.
“We’re going to look at it and see whether there’s any value in what we might do,” Sims added.
Separately, Sims is drafting legislation to address the imbalance in bargaining power between Google and the Australian media businesses that want the tech giant to pay for journalism.
The bills, that will be ready to be introduced to Parliament by December, would empower an arbitrator to make binding decisions on how much Google and Facebook must pay media companies for news content.
Sims said his commission “had a lot of talk” with the US Justice Department before he released a report in July last year that recommended more government regulation on the market power of Google and Facebook that would ensure fair deals for other media businesses and more control for individuals on how their data was used.
Sim’s commission launched Australian court action against Google in July alleging the California-based company misled account holders about its use of their personal data.
The commission alleges the Google misled millions of Australians to obtain their consent and expand the scope of personal information that Google collects about users’ Internet activity to target advertising. Google denies the allegations.
In October last year, the commission sued Google in an Australian court alleging the company broke consumer law by misleading Android users about how their location data was collected and used. That case will be heard by the Federal Court next month. Google also denies that allegation.
Sims said Google was lobbying “every politician at Parliament House” ahead of draft legislation being introduced to make it pay for news.
Google has said the proposed laws would result in “dramatically worse Google Search and YouTube,” put free services at risk and could lead to users’ data “being handed over to big news businesses.”
Facebook has warned it might block Australian news content rather than pay for it.