UAE’s NMC Health identifies $2.7 bln in undisclosed debt

UAE-based healthcare firm, NMC Health, identified over $2.7 billion in debt that had not been disclosed to its board earlier, taking the total debt to around $5 billion, according to a statement on the London Stock Exchange.

“The board believes that some proceeds may have been utilized for non-group purposes,” the company said, which has appointed Moelis and Houlihan Lokey to assist in talks with lenders.

The news of undisclosed debt comes a day after GKSD Investment Holding pulled out of a bid for NMC, in the latest series of potential buyers walking away from the deal.

The London-listed firm said on Tuesday that it is working with its advisers to understand the exact nature and quantum of the undisclosed debt.

In February this year, NMC Health founder, B.R. Shetty resigned from the board of NMC amidst investor concerns that he faced a margin call and misrepresented his stake in the hospital operator.

In December 2019, Muddy Waters Capital LLC expressed its doubts about the financial statements of NMC Health, including its payment for assets, inflated cash balances, profits, and understated debt.

However, NMC denied the report published by Muddy Waters, clarifying that these claims were unfounded.