(Add a quote from the administrators on the calendar, the lenders)
DUBAI, Aug. 19 (Reuters) – NMC Healthcare LLC plans to file an administration request in Abu Dhabi, the UAE-based hospital operator said on Wednesday as part of a three-year turnaround plan that includes a debt moratorium, debt restructuring and asset sales.
His London-listed holding company, NMC Health Plc, is already run by directors Alvarez & Marsal after taking office in April after months of financial turmoil.
NMC Healthcare LLC plans to file an administration request with the Abu Dhabi financial center ADGM, it said in a presentation posted on its website on Wednesday.
Alvarez & Marsal will also be appointed as UAE affairs administrators, he said.
“We are looking to move there as soon as possible,” Marija Simovic, managing director of Alvarez & Marsal, told Reuters, saying the directors were working with the lenders.
The administrative process is similar to a Chapter 11 proceeding in the United States and will allow NMC to seek a debt restructuring deal with dozens of lenders and sell assets to strengthen its balance sheet.
NMC’s implosion this year amid fraud allegations and the disclosure of over $ 4 billion in hidden debt has left some lenders in the UAE and abroad with heavy losses and sparked battles to try to recover the amounts owed.
NMC Health is the largest private healthcare provider in the UAE, operating more than 200 facilities including hospitals, clinics and pharmacies.
As part of its restructuring plan, NMC and its lenders will have until January 30, 2021 to present a binding reorganization plan or the process will shift to the sale of core assets.
Negotiations will begin soon and a list of conditions will be given to lenders by Oct. 31, NMC said.
NMC has agreed with existing lenders to raise up to $ 300 million to fund the business as it prepares to go into administration.
NMC said significant cash had been taken from the company, resulting in limited cash flow and defaults to lenders and suppliers.
According to the presentation, based on the initial assessments of its first half 2019 accounts, the preliminary opinion is that net sales and EBITDA were overstated by 24% and 178%, respectively. A full year audit was not performed by the EY auditor.
The activity got off to a good start in 2020, but the epidemic of the new coronavirus led to significant drops in turnover and EBITDA from March to May.
Performance started to improve in June, with June and July being better than expected, he said. (Reporting by Saeed Azhar and Hadeel Al Sayegh; editing by Jason Neely and Mark Potter)