DUBAI- London's High Court has placed hospital operator NMC Health NMC.L into administration, on the application of one of its biggest lenders, Abu Dhabi Commercial Bank (ADCB), the bank said on Thursday.
NMC recently revised its debt position to $6.6 billion, well above earlier estimates, and warned on Wednesday it was unable to reach agreement with its creditors despite strenuous efforts to address their concerns.
ADCB, which had $981 million in debt exposure to NMC Health, said it and other key creditors had concluded that an administration process is the most suitable route to ensure a rescue and turnaround.
The administrators from turnaround advisory firm Alvarez & Marsal will take immediate control of NMC Health and work on behalf of all stakeholders, ADCB added.
The existing board of directors of NMC cease to have decision-making powers with immediate effect, NMC Health said.
Its hospitals, medical centres, care facilities and other operations will continue under existing management, it said.
"Our absolute priority is to do everything we can to help these key workers provide the highest quality patient care and services," said Richard Fleming, managing director of Alvarez & Marsal Europe and joint administrator of NMC Health.
NMC, UAE's biggest private hospital group, has seen its stock more than halve in value since December after short-seller Muddy Waters questioned its financial statements.
Administration is a process designed for a rapid business recovery, distinct from liquidation.
NMC's troubles have also been compounded by doubts over the size of the shareholdings of major investors, including founder and former co-chair BR Shetty.
Shetty said in a statement to Reuters he is "carefully" undertaking his own investigations and will make these findings known as soon as possible.
"I am extremely eager and determined to bring to light the full facts, and the whole truth, around what has transpired to all stakeholders as quickly as possible," he said.
ADCB has committed to extend short-term working capital facilities to the company when the joint administrators commence their work, it said.
(Reporting by Saeed Azhar. Editing by Jane Merriman, Kirsten Donovan) ((Saeed.Azhar@thomsonreuters.com; +971 44536787; Reuters Messaging: firstname.lastname@example.org))