UAE: Bidders clarify position amid NMC Health pressures

UAE: Bidders clarify position amid NMC Health pressures

UAE: Bidders clarify position amid NMC Health pressures

NMC Health, the operator of the biggest network of hospitals in the United Arab Emirates, said it received approaches from private-equity firms after being targeted by short seller Muddy Waters Capital.

On Monday, NMC Health also said a review was being conducted to verify the size of the interests of some of its key shareholders, including chairman Bavaguthu Raghuram Shetty, to confirm if they had been incorrectly reported. The company is asking its main shareholders for clarity on whether they have pledged any of their holdings as collateral, amid speculation in the market they may have faced a margin call. The stock rose as much as 18 per cent in London, after having lost 46 per cent of its value last week.

The group's shares settled 32% higher Monday after it stated KKR and GK had approached it, giving the stock a boost after plunging sharply following queries by Muddy Waters in 2019 over its financial statements.

On Monday, Muddy Waters had said: "Today's freakish disclosures about even more pledges and debt validate that the cockroach theory is alive and well - what we found is likely just the tip of the iceberg". Further, GKSD on Tuesday confirmed that "there can be no certainty that any offer will be made".

The UAE-based NMC's board has asked its joint non-executive chairman Dr B R Shetty and vice-chairman Khaleefa Butti Al Muhairi to absent themselves from board meetings while their shareholdings in the company are reviewed.

GKSD Investment Holding showed Tuesday that it could propose to buy NMC Health, a day after the London-listed healthcare organization unveiled approaches from two private equity organizations.

The hospital operator said neither party made any offer and no terms were discussed. KKR declined to comment, while GK could not be reached.

But it has lost more than two-thirds of its value since USA -based short-seller Muddy Waters questioned its financial statements in December, prompting major shareholders to sell out. The company has said the allegations are false and misleading.

Finablr shares, also hit by the Muddy Waters allegations against NMC, were up 7.7% at 77.05 pence. NMC's $107m redevelopment of NMC Royal Women's Hospital in Abu Dhabi "contains numerous red flags", the short seller said.

Reuters reported https://www.reuters.com/article/us-nmc-health-m-a-exclusive/exclusive-two-groups-one-backed-by-chinas-fosun-bid-for-nmc-health-stake-sources-idUSKCN1VB20R previous year that NMC was also the target of two groups, one backed by China's Fosun, looking to buy a 40% stake in it.

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