Dubai: Abu Dhabi-based hospital operator NMC Health has sold a 53 per cent stake at its Saudi subsidiary, thus drawing in fresh funds for its ongoing turnaround strategy. The stake sale was at the Saudi Medical Care Group, and should be completed in the second-half of this year.
Thus, NMC – the UAE’s biggest healthcare operator in the private sector – had divested all non-core international assets. It was in 2019 that NMC entered a JV in the Kingdom contributing five of its hospital assets and an additional cash injection to own 53 per cent stake in SMCG (formerly NMC KSA). SMCG’s portfolio now includes seven hospitals and three clinics.
Saudi entity GOSI currently holds 47 per cent and could take on the rest pending final approval from the Saudi authorities. The value of the deal has not been revealed.
“In 2020, we presented a turnaround plan for NMC that would see us divest our international operations and focus on our core business in the UAE and Oman,” said Michael Davis, CEO. “It was clear to us that this approach would be in the best interest of the company and would provide the best value for our stakeholders.
“The successful sale of NMC’s last substantial non-core international asset represents an important milestone as we take the final steps to exit the administration process as NMC emerges as a robust, focused, profitable, customer-centric business.”
On the operational side, in the UAE and Oman, NMC Health is back to full health, seeing off 2020 and 2021 with its financials in good order.
Part of a bigger strategy
NMC Health has decisively moved on from the constant crisis of the last two years, which surfaced late 2019. That led to the departure of the founder, B.R. Shetty from all levers of management, and other senior executives. The company went into administration in April 2020 and since then has been scripting a hard-fought turnaround. NMC Health is in the process of changing to an ownership led by its creditors. This came about after billions of dollars in bank loans were diverted from NMC's books, which was revealed in early 2020.
In a statement, Richard Fleming, Managing Director of Alvarez & Marsal Europe LLP and Joint Administrator of NMC plc (the UK operations) and NMC Healthcare said: “This sale marks an important step for NMC. With the support of our creditors and partners, we have made excellent progress through the administration process. The sale announced today is one of the final pieces in this jigsaw, as we position NMC to deliver its long-term growth plan.”