Troubled hospitals provider NMC Health has asked its banks for an “informal standstill” on its debt payments as it faces a cash crunch amid an accounting scandal.
NMC, a member of the FTSE 100 index, said on Monday it was asking lenders to hold off from exercising their rights, which could include demands for debt payments or collateral, on the company’s £2bn debt pile.
The London-listed company, which is based in Abu Dhabi and runs private hospitals in the Middle East, is in crisis after it revealed accounting inconsistencies, including revelations over the ownership of shares that could trigger the debt payments.
The group, which treated over 7.5 million patients in 2018, reported revenues of $2.1bn (£1.6bn) in the same year. It faces a cash crunch if its lenders call in the debts.
The latest development was prompted by the admission that the combined stakes of the main shareholders: Bavaguthu Raghuram Shetty, the founder and co-chairman of the company, Saeed Mohamed Butti al-Qebaisi and Khalifa Butti al-Muhairi , had fallen below 30%. The terms of NMC’s debts include “change of control” provisions – including a requirement that the principal shareholders own more than 30% of the business between them– that allow the banks to call in their loans with only five days’ notice.
NMC has hired investment bank Moelis & Company, accountancy firm PwC and lawyers Allen & Overy to advise on discussions with its lenders as well as managing the company’s finances.
