Dubai: ‘Don’t Worry…’
That is the message Michael Davis, CEO of the Abu Dhabi hospital operator NMC Healthcare, is telling the company’s 12,500-strong workforce in the UAE and Oman. Davis is out to reassure staff that whatever changes are taking place at NMC are at the shareholder level and will not have a bearing on operations and on staffing.
“We have made it through the past 18 months and emerged stronger, leaner, and more focused on our patients and the company than ever before,” said Davis. “I am so happy we have reached this point today and am grateful for the support the company received from so many of our stakeholders.”
His reference is to the change in shareholding at NMC, a process that was initiated on September 1, with lenders and creditors set to take over the healthcare company. It will mean that the likes of ADCB and other banks that have billions of dirhams in exposure to the company have direct control of the company. It will see NMC exit administration, which was placed on it in April last year by a UK court and later on by a court in Abu Dhabi.
The new lender- and creditor-led shareholders will work over the next two to three years to re-build NMC, at which point they plan to sell off the UAE and Oman operations to a new buyer. The hope is that by doing so, they stand the best chance of recovering the better part of the money they are owed.
Closure on B.R. Shetty saga
The September 1 decision marks the formal end of NMC’s legacy with Dr. B.R. Shetty, who founded the hospital operator in the mid-1970s.
“Yesterday (September 1) 95 per cent of our creditors voted to exit administration through the DoCA (Deed of Company Arrangements) process and become the new owners of NMC Healthcare,” said Davis. “What this means is that the banks and creditors that originally loaned us money will now own NMC Healthcare, with the largest shareholder - but not the only one - being ADCB. Yesterday’s vote was the first step toward this milestone, but it will take three- to five months for the transfer of ownership to finish.
“This is unprecedented in the Middle East - and an important and exciting day for all of us.”
- Michael Davis joined NMC Health (as it was named at the time) as COO in March 2017.
- He held that position until he was named as interim CEO on February 27, 2020, which was when the problems at NMC over fund diversions came to light.
- He was confirmed as CEO on October 22, 2020.
Uncharted territory
Davis is on point about this – getting an enterprise from the brink is something that has few precedents in the UAE and Gulf. Especially with a business as systemically important as NMC is in the healthcare space. But in the last 18 months, NMC has absorbed the worst of shocks and each time gone on to a position of relative strength operationally.
All this while investigations were going on into the diversion of funds under the earlier shareholders and management, with more than $4 billion unaccounted for. Again, Davis insists that the staff should remain focussed on the smooth running of the hospitals and clinics rather than be fixated over investigations and what happened in the past.
“The first question many of you (staff members) asked was: “What does this mean for me”? As for now, nothing at all changes,” he added. “I am working closely with the new owners and they are very supportive of NMC Healthcare and the work you do.
“They understand that healthcare is a complex business, and it is important to the creditors (just as it is to the joint administrators from the UK consultancy Alvarez & Marsal) that you are able to continue your work uninterrupted and that you have the tools you need to do your job.
“We have taken a business that had immense financial challenges and huge amounts of debt and turned it around from the brink of collapse. Today the company is more stable and is performing better financially than ever before.”
