Dubai: The current management at NMC Healthcare – UAE’s biggest privately-owned hospital operator – will not be distracted by what its founder Dr. B.R. Shetty has been doing.
Even when he has filed a $7 billion plus compensation claim in a New York court alleging that he was a victim of financial fraud carried out by the former management of NMC working with a coterie of banks and officials. It is not clear why Shetty, based in the south Indian state of Karnataka for more than a year now, filed for compensation in a US court. Nor is it known whether Shetty intends to fly back to the UAE now that flight services have resumed.
But none of this matters to NMC Health and the executives at Alvarez & Marsal, the consultancy that has been overseeing the hospital operator’s return to full financial health. Or somewhere close to it.
“We don't see that cutting across what we do [here],” said Benjamin Cairns of A&M, responding to a question whether Shetty filing a case in New York will have any bearing on NMC’s immediate future and plans. (A&M was appointed by a UK court to take on the task of restructuring NMC after evidence of billions of dollars of bank loans being diverted from the company’s coffers came to light early last year.)
Banking industry sources who have been tracking the NMC-Shetty situation since December 2019 echo these sentiments. Shetty as a factor in deciding NMC’s future is non-existent, according to them. “The future of NMC will be decided in the UAE – that and recovering the lost billions owed to banks are far more important than Shetty’s claims,” one banker said.
“I'm not sure if there's a rhyme or reason to this, but we had a record number of multiple pregnancies delivered at NMC,” said Michael Davis, CEO. “We had a total of 17 deliveries that were either twins, triplets, or quadruplets. So we had a record number of premature babies in the ICU. About 43 patients, and the youngest there being around 600 grams."
NMC also treated a baby born last year, weighing a minuscule 250 grams - or about the dimensions of an apple. Over the succeeding months, a team at NMC's Royal Hospital treated the baby to full health and was finally discharged from hospital care in the first-half of this year.
That 250 grams is the second lowest birth weight baby delivered in the world.
Change of ownership
NMC’s next important date is September 1, when the process to change the ownership structure will get going. This will mean the creditors of NMC will formally assume ownership of the entity, thus winding down the rule by the administrators. The creditors will decide the future course of action and how long that process will take.
Based on the current plans, they will oversee NMC’s sale to a new buyer, which will inject some much-needed funds into the organisation. This process, ideally, could take a further two to three years.
“For the September 1 meeting, a simple majority among the creditors will be enough to get the new ownership structure approved,” said a source.
This is vital – while A&M have carried the support of all creditors, there is one significant holdout. Dubai Islamic Bank is another creditor, and has taken up the matter of loan recovery on its own. The bank has legal cases going on in a local court, and had scored a significant win recently.
Even if DIB declines to approve the September 1 ownership change plan, NMC and A&M officials are sure they have enough votes with them to take the next steps. Once the majority vote is confirmed, it will take a further three- to five months for the approvals on ownership transfers to be effected.
If this time-table holds, by January of 2022, NMC Healthcare will have migrated to a full change of ownership for the first time since B.R. Shetty founded the company in the mid-1970s.
Selling in Saudi
One of them would be to sell NMC’s joint venture in Saudi Arabia. “We are in close discussions with an interested party,” said Cairns. NMC had earlier identified a strategy where it will focus exclusively on UAE and Oman operations and put all of the other interests on sale.
Apart from Saudi, its interests in UK-based Aspen, a private operator there, will also be sold in due course.
On its core operations – providing healthcare support in the UAE – NMC is getting all the numbers right. Whether that is handling COVID-19 related treatment needs or handling a most active maternity ward across its hospitals, NMC is making its presence count.
“One of my biggest priorities is to continue to push toward better operational efficiency and to improve our business and clinical processes across the organization,” said Michael Davis, CEO. “Because we need to continue to deliver this strong performance we've done in the first-half of 2021.
“I personally look forward to working with the new ownership structure and deliver as much value as we possibly can to those people that have supported us during what was a very difficult time for the organization.”
On September 1, that process of transition takes a huge leap forward. Irrespective of what plays out in a court in New York…