UAE – NMC Health, a hospital operator based in the UAE, announced that it has sold 53% of its stake in Saudi Medical Care Group (SMCG), marking the company’s final international asset sale as it prepares to exit administration.

The transaction is expected to be completed by the second half of 2022, according to NMC Health, which did not identify the buyer or specify the deal value.

“The successful sale of NMC’s last substantial non-core international asset represents an important milestone as we take the final steps to exit the administration process as NMC emerges as a robust, focused, profitable, customer-centric business,” Michael Davis, chief executive of NMC Healthcare, said.

NMC Health went bankrupt in 2020 after activist investor Muddy Waters claimed that the company had overstated its cash balances while understating its debt.

A subsequent investigation uncovered more than US$4 billion in hidden debt, which left many UAE and overseas lenders with heavy losses; thus, contributing to the company’s demise.

Prior to being placed into administration in April 2020, NMC was one of the largest privately-owned healthcare groups in the UAE, with 200 healthcare units in 17 countries.

NMC, the UAE’s largest private healthcare provider, had stated that it would exit administration by the end of 2021 as part of a restructuring agreement, but that date was pushed back.

NMC Health is expected to emerge from administration after its creditors approved a restructuring process last year.

According to the company, it has divested all of its non-core international assets.

NMC Health formed a joint venture with Hassana Investment Company, the investment arm of Saudi Arabia’s General Organization for Social Insurance, in 2019.

It contributed five of its private hospital assets as well as additional cash to acquire a 53% stake in SMCG (formerly NMC KSA). In Saudi Arabia, SMCG now has seven hospitals and three clinics in its portfolio.

Founded by Indian entrepreneur BR Shetty and spanning operations from Abu Dhabi to London, the collapse of NMC, became one of the biggest scandals on the UK stock exchange in years. Creditors were saddled with massive debts, and shareholder value plummeted to zero.

NMC Creditors are expected to seize control of the company as early as the end of March. The response of the lenders to the restructuring and turnaround plan has been led by Abu Dhabi Commercial Bank, which has the most debt exposure to NMC.

“This sale marks an important step for NMC. With the support of our creditors and partners, we have made excellent progress through the administration process,” Richard Fleming, managing director of Alvarez & Marsal Europe and joint administrator of NMC and NMC Healthcare, said.

“The sale announced today is one of the final pieces in this jigsaw, as we position NMC to deliver its long-term growth plan.”

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