Dubai: Abu Dhabi headquartered NMC Health is not going into “liquidation”, according to its newly appointed administrators.
In a message sent to its 15,000 plus staff, the administrators emphasised that “Liquidation usually means shutting down of a business and the sale of its assets for the greatest possible amount, to enable the people to whom it owes money to be paid back.
“That is not what is happening in this case,” it said in the statement to staff.
“Administration is not the same as liquidation. Administration is a means by which the management of a company that is in financial difficulty passes to a licensed professional.”
“The Administrators are three senior professionals from a leading global financial advisory firm, and their job is to try to stabilise the business and keep it functioning. In the case of NMC, given its importance to the UAE’s healthcare system, keeping the business going is a vital social priority.
It was on Thursday that a UK court appointed administrators from Alvarez & Marsal, the corporate turnaround specialist. This followed a submission in the UK court earlier this week by Abu Dhabi Commercial Bank, which had the highest loan exposure to NMC Health of Dh3.6 billion.
The statement to the NMC staff was signed by Richard Fleming, one of the three administrators, and Managing Director of Alvarez & Marsal. Mark Firmin and Ben Cairns are the other two administrators.
“The most important point I would like to make at this stage, is that all hospitals, medical centres, care facilities and distribution services will be unaffected by the appointment… so their current activities will not change.
“We recognise fully that this has been an extremely difficult period. You have faced uncertainty about the future of your business, while working tirelessly as the world responds to the COVID-19 pandemic.
“We, your current CEO, Michael Davis, and the management teams across the group, will be working to stabilise the business for you, your colleagues, patients, customers and other stakeholders. It is our intention that all employees are paid as usual."
Mention of Michael Davis' name could be a pointer to how operational roles are assigned in an administrator-led NMC. Davis was appointed in an interim CEO capacity.
“Davis could be the crucial link to continuity for the organisation," said a banker. "He knows the operations well and has had access to the banking and regulatory offices. He doesn't carry any past baggage of having been too close to the previous NMC management."
Business as usual
On the operational side, there will not be any changes – it was the core message Fleming was putting out.
“We intend to keep everything going exactly as currently,” the statement said. “The problems with the business that you have read about are not related to the day-to-day operations, or with the hospitals and clinics.
“We know how important it is for the UAE’s healthcare system to be as strong as possible. NMC Health is central to that objective.”
The UK court order vests complete authority with the administrators. It means NMC’s Board of Director or senior shareholders will not have any say in the running. Nor can they decide on the future course of action to be taken to clear off the accumulated debts of $6.6 billion.
All those decisions are left for the administrators to decide upon.
“The Administrators now have full control of NMC Health plc,” the statement said. “They can take any action they deem necessary to ensure the group continues to deliver the highest quality healthcare services and medical support to existing and future patients.”
• Deciding on the most appropriate strategy to achieve the company’s business objectives;
• Identifying and securing assets;
• Securing and retaining the financial and operational records of the entity;
• Collecting debts due to the entity;
• Dealing with creditor queries and claims;
• Reporting to creditors.
The operating entities remain under the control of the current management team.