(Alliance News) - NMC Health PLC on Friday defended itself against a specific line of attack by short seller Muddy Waters.
NMC said STH Consultant, the engineering consultant retained by NMC, has provided written confirmation of the total built-up floor area of NMC Royal Women's Hospital in Abu Dhabi at 18,595 metres squared. It also made publicly available floor plans for the hospital approved by the Health Authority of Abu Dhabi.
The statement came in response to attacks on the FTSE 100-listed hospital operator by Muddy Waters Capital LLC over its accountancy practises. On Monday, Muddy Waters, which was founded by short-seller Carson Block, called on the healthcare company to disclose the amount of the Aspen lease liability and a reconciliation of its debt.
In a series of reports last week, Muddy Waters highlighted a USD107.4 million investment by NMC in the redevelopment of NMC Royal Women's Hospital, previously known as Brightpoint Royal Women's Hospital.
"Red flags" in this investment, it said, included the cost being USD7,700 per square metre, exceeding Muddy Waters' expectation of USD3,500 to USD4,000.
Further, NMC's decision not to disclose that the contractor responsible for the renovation work on the hospital "appears to be de facto controlled by [NMC Chair] BR Shetty", Muddy Waters said in its statement Tuesday last week.
Further, Muddy Waters found "some indications" that KBBO Group, "controlled by NMC insider Khalifa Bin Butti", also had some involvement in the development.
NMC's majority shareholders include Saeed Bin Butti, who holds a 17.4% stake, while 14.7% is owned by Executive Vice Chair Khalifa Bin Butti and Joint Non-Executive Chair Bavaguthu Raghuram Shetty a 15.9% interest. In addition, 7.3% belongs to joint Bin Butti vehicle Infinite investments.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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