Alvarez & Marsal to administrate NMC Healthcare in UAE

06 October 2020 Consultancy-me.com

Alvarez & Marsal’s (A&M) involvement in the NMC Healthcare case continues, as the firm is handed administration responsibilities for 36 of NMC’s operating businesses stretched across the United Arab Emirates (UAE).

Richard Fleming and Ben Cairns, Managing Directors at Alvarez & Marsal, have been administrators for NMC’s holding company in London since April, and have now been brought on board by Abu Dhabi Global Market (ADGM) Court to manage NMC’s affairs in UAE.

Fleming leads Alvarez & Marsal’s restructuring practice in Europe, leveraging more than three decades of experience in the field including at the helm of KPMG’s restructuring practice in the UK. Cairns also boasts decades of experience in the advisory and restructuring space, with a two-decade plus tenure at EY under his belt.

The pair are now managing NMC’s affairs in London as well as across the UAE ­– the latter spanning 36 different business entities. In a statement, Fleming revealed that significant funding has been secured to keep NMC’s creditors at bay, particularly at a time when healthcare services are already under strain.

Alvarez & Marsal to administrate UAE’s NMC Healthcare

“As part of the administration, the administrators have arranged $325 million of additional financing to ensure we have sufficient funds to support the business through the Covid-19 disruptions and financial restructuring process. All hospitals, medical centres, care facilities and other operations in the group affected by the administration will continue to operate as they have to date,” he said.

To ensure that NMC’s crucial healthcare services remain on track, Fleming revealed that A&M will engage in “light touch” administration, where the focus will remain solely on NMC’s financials. All business operations and healthcare services will be left to the NMC’s management team, with minimal disruption and no change in modus operandi.

The NMC administration case

Once a bright spot in the UAE business landscape, NMC was the first Abu Dhabi business to be listed on the London Stock Exchange – raising $190 million in its 2012 IPO and reaching a valuation of $8 billion. The firm stretches across 200 practices – hospitals, clinics and pharmacies – across the world, making it the largest private health firm in the UAE.

An investigation late last year revealed more than $4 billion of missing debt in the firm’s finances, marking the start of a financial saga. Following the investigation, NMC’s share value plummeted 50%, losing the company $1.5 billion in market capitalisation, and the firm’s holding company in London was immediately placed under administration. Fleming and Cairns were brought on board to at the time.

In August, NMC Healthcare in Abu Dhabi decided to file for administration with ADGM Court, at which point A&M advisors were brought on board to oversee a three-year turnaround strategy. The global consultancy has now been handed this administration process as well for the UAE jurisdiction.

For Acting CEO at NMC Healthcare Michael Davis, the move is a promising development. “This is a positive next step in NMC's restructuring process, allowing us to address the financial challenges we've faced since the fraud was uncovered earlier this year. NMC is a strong business operationally and we will continue to function as usual and care for our patients through the administration period,” he said.