Dubai: NMC Health has asked for a “temporary suspension” of its London listed shares, which the stock market regulator has agreed to.
“The company is focused on providing additional clarity to the market as to its financial position and to restoring its admission to trading. The company will continue to be bound by listing, transparency and disclosure rules.”
NMC Health operates multiple hospitals in the UAE, both directly owned and those that it acquired such as Al Zahra. In 2018, it reported its best ever performance in terms of revenues and profit.
This represents a huge come down for the once high-flying shares, with the NMC Health market capitalization crossing $8 billion at one point. The shares were even part of the FTSE 100 index.
The suspension of the shares less than 24 hours after NMC announced the dismissal of its CEO, Prasanth Manghat, suggests things could get a lot worse for the company, at least from an internal standpoint. It means that in recent weeks the company has seen the stepping down of its founder Dr. B.R. Shetty as chairman, as well as that of its vice-chair, Khaleefa Butti Omair Yousif Ahmed Al Muhairi.
Market analysts say suspending the trading of shares was the most sensible thing NMC could have done under the circumstances. “The drip-drip of bad news could have suffocated the stock’s performance – the only plus would be any positive numbers for the 2019 results,” said an analyst. (NMC Health, the Middle East's largest healthcare operator, is expected to announce its 2019 financials in the next few days.)
The share price had dropped nearly 70 per cent since late December, and then in the last three weeks had managed to make partial recovery, moving up 30 per cent.
The shares gained after news emerged that a New Zealand based billionaire, Richard Chandler of Clermont Group, was picking up stake in the company. NMC Health itself has been at the centre of takeover talk, with the names of leading global investment houses being mentioned in this regard.
Can this be contained?
The bigger question as far as analysts are concerned is whether the other Dr. Shetty enterprise listed on London stock Exchange – Finablr - can be ring-fenced from NMC Health’s issues. Finablr consolidates all of Dr. Shetty’s financial services interests, including UAE Exchange Centre and Travelex.
Finablr, which was listed last year, has seen its share price hit by the same investor concerns as faced by NMC Health. “Will Finablr be able to keep its distance from what are primarily problems at NMC Health?,” according to an analyst. “Given its common shareholding in the form of Dr. Shetty, investors will have every reason to be worried.”