(Sharecast News) - Beleaguered Gulf hospital operator NMC Health was placed in administration on Thursday after one of its largest creditors took legal action.
Turnaround experts Alvarez & Marsal Europe were appointed after the UK's High Court granted the request from Abu Dhabi Commercial Bank, which has $981m in debt exposure to the healthcare firm.
"Our absolute priority is to do everything we can to help these key workers provide the highest quality patient care and services," said Alvarez & Marsal Europe managing director Richard Fleming.
NMC Health is the holding company of the largest private healthcare group in the United Arab Emirates (UAE).
"The administrators' primary objective is to ensure the continuity of patient care, stability for staff and suppliers, and immediate financial security for NMC's operating companies," NMC said in a statement.
"The operating entities are unaffected by the administrators' appointment. NMC's hospitals, medical centres, care facilities and other operations in the group will continue to operate, under existing management, with patients continuing to be treated as they are currently."
NMC Health, founded by Indian billionaire BR Shetty, has been embroiled in an accounting scandal in recent months, making a series of damaging disclosures after a report by activist investor Muddy Waters last year alleged it inflated cash balances, overpaid for assets and understated its debt.
Last month, the company said debt stood at $6.6bn, substantially higher than the $2.1bn declared in its last filed accounts. A review committee also discovered evidence of "suspected fraudulent behaviour".
Following the disclosures, two joint non-executive chairmen, including Shetty, an executive vice-chairman, a chief executive, chief financial officer and a member of the company's treasury department all left the company.
Earlier this week, UAE companies were asked by market regulators to disclose their exposure to NMC Health, and to the Shetty-owned Finablr Group and its foreign exchange business UAE Exchange - known for its Travelex brand.
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