(Adds ADGM statement, source information)
By Saeed Azhar and Davide Barbuscia
DUBAI, July 12 (Reuters) - Troubled hospital operator NMC
Health's entity in the United Arab Emirates (UAE), NMC
Healthcare LLC, is considering applying for restructuring and
insolvency proceedings locally, two sources familiar with the
matter said.
The move comes three months after NMC Health Plc,
the London-listed holding company for the hospital group, went
into administration in April after months of turmoil over its
finances.
The two sources told Reuters that NMC Healthcare LLC was
looking at options to file under the jurisdiction of Abu Dhabi
Global Markets (ADGM), which has its own laws relating to
insolvency and corporate restructuring.
Such a move would help create a framework for the
recognition of debt claims while the administrators of NMC
Health Plc finalise the scheme of arrangement with creditors,
one of the sources said.
A third source said the ADGM move is an option to obtain
protection from the court from any enforcement proceedings from
creditors, similar to Chapter 11 in the United States.
A scheme of arrangement is a binding agreement about payment
of all, or part of, a firm's debts over a period of time.
The administrators for NMC Health declined to comment.
The ADGM Registration Authority does not comment on its
regulatory operations or disclose its engagements with external
entities publicly, it said in an email.
NMC Health is the largest private healthcare provider in the
UAE, operating more than 200 facilities including hospitals,
clinics and pharmacies.
NMC's operating entities were unaffected by the appointment
of administrators in April and services continued.
That is unlikely to change as UAE authorities are keen to
ensure hospital services in the Gulf state are not affected
during the coronavirus pandemic, the second source said.
NMC's implosion this year amid allegations of fraud and the
disclosure of more than $4 billion in hidden debts has left some
UAE banks and overseas lenders nursing heavy losses and prompted
legal battles to try and recover money owed.
The troubles began in December when short-seller Muddy
Waters raised concerns over the company's financial statements
and were compounded by doubts over the size of stakes of major
shareholders, including founder BR Shetty.
(Reporting by Saeed Azhar and Davide Barbuscia; editing by
Emelia Sithole-Matarise and Louise Heavens)