(Sharecast News) - Shares of NMC Health fell sharply on Friday following a report that the Abu Dhabi-based healthcare operator was in talks to raise hundreds of millions of dollars of off-balance sheet debt to fund new hospitals.
According to the Financial Times, NMC has sought this year to raise a €200m loan through a complicated chain of special-purpose vehicles.
Draft deal documents seen by the FT and dating from the spring and summer showed the company was planning to raise the loan through a Dubai entity, to fund the construction of hospitals to continue its expansion in the Middle East.
The Dubai project company would borrow the €200m from a financing vehicle in Luxembourg, backed by shares in two of the company's existing hospitals in the UAE. Estates SA, a Luxembourg investment firm listed in the documents as helping set up the special-purpose vehicle in the grand duchy, confirmed to the Financial Times that they had "analysed this project".
"In the end, the project has not been implemented with us," a spokesperson told the FT.
While the deal documents were said to clearly state that NMC Health would guarantee the loan, the FT cited two people with direct knowledge of the matter as saying that the complicated structure was aimed at allowing the company to exclude the facility from its corporate debt figures.
NMC Health has been under pressure this week after research firm and short-seller Muddy Waters put out a report highlighting "serious concerns" about its financial statements and accusing the company of manipulating its balance sheet to understate debt.
At 1145 GMT, the shares were down 22% at 1,202p.
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