Shares in NMC Health and Finablr plunged on Wednesday after two major shareholders launched a discounted share sale in the London-listed groups, weeks after NMC was hit by a short-selling attack by U.S. firm Muddy Waters.
The healthcare firm's vice-chairman Khaleefa Al Muhairi and its second-largest shareholder Saeed Al Qebaisi have together sold NMC shares worth 375 million pounds ($493 million). The deal was priced at 1,200 pence per share, a bookrunner said, adding that the sale was oversubscribed. The price is at a discount of about 20% to NMC's last close.
Qebaisi and Muhairi have also sold about 6% of total shares in Finablr for roughly $72 million. The payments firm is co-chaired by Bavaguthu Raghuram Shetty, also the founder and co-chairman of NMC.
Shares in Finablr, whose ransomware-hit Travelex unit is also chaired by Muhairi, were sold at a discounted 135 pence per share.
NMC shares were down 15.3% at 1,266.5 pence at 1528 GMT, while those of Finablr were 17.2% lower at 127.9 pence. Earlier, Finablr stock hit a record low of 123.2 pence.
NMC, United Arab Emirates' largest private healthcare provider, launched an independent review of its finances after short-seller Muddy Waters questioned the value of its assets and cash balance while announcing a short position.
Short selling involves borrowing an asset and selling it with the aim of buying it back at a cheaper price for profit.
At Wednesday's session low, NMC had lost nearly 3 billion pounds in market value since the report was launched on Dec. 17. It has denied the allegations.
The two investors sold the shares to repay some of their debt and the debt of some corporate entities owned by them, the bookrunner said.
"Given the dramatic share price moves in the second half of December, this was the obvious first window for launching the sale," a source familiar with the transaction told Reuters.
The sale price factored in all the context around Muddy Waters, the independent investigation and the size of the sale, the source said. "This is the discount the market is willing to buy at."
NMC on its part said the sale was not related to its performance or prospects, adding the shareholders "remain supportive".
Finablr declined to comment. Credit Suisse and Deutsche Bank managed the sales.
Muhairi will retain a 12.5% stake in NMC, while Qebaisi will keep a 4.7% holding. The investors jointly hold roughly an additional 7% in NMC through Infinite Investment.
The investors could not be reached for comment.
($1 = 0.7606 pounds)
(Reporting by Pushkala Aripaka, Aakriti Bhalla in Bengaluru and Abhinav Ramnarayan in London; Editing by Aditya Soni, Sherry Jacob-Phillips and Jan Harvey) ((Pushkala.A@thomsonreuters.com; Twitter: @pullthekart; within UK: +44 20 7542 1810, outside UK: +91 80 6749 6633;))