Dubai: Abu Dhabi Commercial Bank (ADCB) on Thursday disclosed in a statement that the bank’s exposure to NMC Group of companies is approximately $981 million (Dh3.6billion).
“The company’s (NMC’s) liabilities to the bank (ADCB Group) totaled approximately $981 million as at 31 March 2020, which represents less than 1 per cent of the bank’s total assets,” ADBC said in a statement.
According to ADCB, the credit was provided to the NMC Health Group through a combination of facilities extended by ADCB, as well as by Union National Bank (UNB) and Al Hilal Bank prior to the merger of the three banks in May 2019.
No estimate on impairments
The bank said it is currently not in a position to quantify anticipated impairments at this time due to rapidly evolving developments at the NMC Health Group.
The ADCB Group is among over 80 major local, regional and international financial institutions that extended credit to the NMC Health Group, which is listed on the London Stock Exchange.
The bank said following recent developments at NMC, the bank has initiated discussions with the NMC Health Group and other substantial creditors to implement appropriate solutions to address the company’s financial defaults, governance and other issues.
“ADCB is deeply concerned by NMC Health Group’s recent announcements of previously undisclosed liabilities of over $ 4 billion since the publication of interim reviewed financial statements as at 30 June 2019 and disclosure of suspected irregular activities and misrepresentations in relation to the company’s past financial activities,” ADCB said in a statement.
NMC’s known debt pile has more than tripled in recent weeks to $6.6 billion, up from the $2.1 billion reported at the end of June. Following suspected fraud and financial irregularities the company’s chief financial officer and chairman have resigned.
big hit on profits
ADCB which reported a total assets of Dh405 billion last year is expected to face major hit on its profits during the current year depending on the extent of impairments it will have to take on its exposure to the NMC Group
ADCB shares fell 5 per cent on Wednesday, the maximum decline allowed. The stock has traded limit down in almost every session over the past week, extending losses this year to 44 per cent.
Committed to support NMC
ADCB said in a statement that as a significant stakeholder in the NMC Health Group, ADCB is committed to assuring the immediate operational effectiveness as well as the long-term sustainability and value of the company.
“ADCB will pursue actions that support these aims in the interest of the Bank and key stakeholders of the NMC Health Group, including employees, patients, business partners and creditors. ADCB appreciates the essential role that the NMC Health Group plays in our communities, particularly during the current challenging circumstances,” the bank said
ADCB has reportedly hired Lazard Ltd. to advise on its exposure to NMC Health and Finablr, as the companies' financial troubles mount. Besides ADCB, other lenders to NMC include HSBC Holdings Plc, JPMorgan Chase & Co. and Standard Chartered Plc, Bloomberg reported on Tuesday.
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