Member Info for adzy2k11

Rastuss - I was asking how do you short sell an OTC instrument. To my knowledge the ADR is not exchange-listed, only trades over the counter. You can write a swap on an OTC, but I’ve never heard of being able to outright short such an instrument. Please correct me if I’m wrong?

Thanks For that explanation, but it still does not explain why the price would go from $0.13 to $6 in two days. Why wouldn’t it go closer to zero on high volume?

The undeniable fact here is that somebody is buying the ADR and the price is going up on large volume. Why and for what reason? I think we all must just admit we really have no idea. It’s pointless making up fictional explanations to justify it.

Rastuss - Deutsche Bank is the sponsor, it might well be nothing but I don’t understand your point on ADR technicality? Care to elaborate? Also how can it be short covering, how do you short sell an OTC instrument? Any explanation as to the huge volume?

Waiting to hear back from IG (email sent on Thursday). Anybody else have a SB position that’s been repriced?

I must say there’s a hell of a lot of movement (both price & volume) on that ADR!

You might have spoken too soon: https://www.thetimes.co.uk/article/nmc-health-could-turn-to-market-for-cash-qscx0fjbx

I disagree, there’s no cost to doing a group litigation (against the former directors) and y’all have more time on your hands these days so more power to you I say. Rastuss - I realise it’s a minuscule chance but just wondering why you’re so against it?

There’s got to be more PIs here. Please keep passing the link along.

https://www.surveymonkey.com/r/HZHXVSS

So far 97 replies:
1) 78 people (Or 81% of people) invested during or after December 2019
2) £4.1 million lost in total
3) Total of 327,604 shares held (0.16% of the company)

Will give it a few more days and then please include this information in your emails to the administrators and MPs etc.

“ The last people the administrators will feel pressure from are the shareholders“

Perhaps, but the FT also confirmed the large IIs are grouping together for legal action too. We shouldn’t underestimate the resources of Capital Group, Wellington Management, blackrock etc.

Rastuss - not necessarily, we don’t know how long for or how exactly this extra debt was being serviced.,. and like I said, it would depend on how much debt is recoverable and what terms any potential new long term debt plan is based on. We simply do not know the assets or earnings potential of the business. Until we do we can’t make any assumptions as it it’s accuracy or otherwise.

Rastuss - at this point I think most people understand this obvious fact you’ve mentioned a few times (I hope). No matter how slim the chances, there really is no harm for those who lost here to put pressure on the administrators. The only hope, as you say, is if they miraculously recover some of that debt. We still don’t know if the EBITDA ($650m) reported on the income statement is incorrect. In the rare event the EBITDA turns out to be real, and if they can recover some of the illegitimate debts and refinance the rest over 10 years then just mathematically it could be serviceable over a long period of time.

Lenders should be prepared to extend the ten year consolidated loan even further depending on the recovery process. It is important to get the patient out of ICU, don’t mind the pun, and given the critical role health care plays in the country and region it is likely down the road strategic long term investors including government entities will emerge. The health care model is good and it would seem that BR and his cohorts were smart not to cripple that part of the company. Why would they? It was the cash cow they could leverage to take unrecorded loans. While these remain allegations it would seem in time more details will emerge of the massive hole that has been left in the company.

If banks want to be short sighted and seek a forced liquidation I suspect that there will be enough eager investors to pick up select health care assets. However the realised values will be no where near the level of he current exposure. A forced sale might well be the eventual course that this saga will take, however of all the options it will more than likely be a very painful process.

To long time residents of UAE NMC and the name of B R Shetty were hallowed as a rags to riches story that Emaratis and expatriates both alluded to with pride. That success story has crashed to the ground amid allegations of fraud, deception, and left a gaping hole in the financial stability of the NMC group. Considering it’s future being torn between a forced liquidation and court administration leading to some semblance of normality it is important to understand how all this happened.

Only a few days ago B R Shetty was interviewed by a Dubai based newspaper and all he had to say was wish the newly appointed Chairman the best. The reporter did not bother to ask what B R, as he was commonly known, thought of the debacle of his mighty empire? How could $4 billion plus of loans not only not be recorded in the books of the company but the proceeds used for ventures of related companies? With Central Risk data on each borrower available did not the lending banks reconcile their exposures with the central risk data? How much of this lending by banks, especially in the UAE was name lending because it was BR and how could it go wrong? The Board of the company had stalwarts from auditing powerhouses who after retiring were serving on the Board of the company. Surely was their experience not available to create compliance within the company?

Bankers who piled in such colossal debt, $6 billion of it, of which $4 billion was unrecorded, cannot plead ignorance to the situation. We are not talking of a 10% misreporting of debt but a misreporting of over 200%? One of BR’s modus operandi was to cultivate bankers within different banks who were sold on the BR story and credit compliance may have been out aside to please the man. The authorities will need to do a massive forensic exercise into the lending process and credit decision making in the case of the exposure to BR and his group of companies.

This brings one to what is the solution. Someone once said that when banks have over lent to a company then they only hurt themselves in enforcing a liquidation. The total worth of the group is perhaps $2 billion with a forced sale value of perhaps less than half of that. Banks will lose a great deal by being stubborn about this settlement. A white knight buying the business, which in the long run can become solvent, is unlikely given the current situation.

Thus in my view the banks should agree to roll their exposures into a consolidated ten year loan with all lenders agreeing to inter-creditor agreements. A board including major lenders and industry experts should be created and a recovery path be worked out. Side by side actions to recover the funds diverted to related companies should begin in earnest and quickly. All $4 billion of unrecorded debts could not have just disappeared without creating an asset trail.

that was at typo, the article said $8.6bn then went to say $4bn in undisclosed debt, so i think they meant $6.6bn.

and while i totally agree that shareholders have lost and should not expect anything back, it doesn't take long to complete a survey, join a fb group and send some emails to solicitors and join a group litigation suit (if, and when one appears). Most people have more time at home now, so it's no skin off your nose for trying. But yes, expect nothing back.

NMC had resorted to requesting accelerated payments from an Abu Dhabi-controlled health insurer to pay salaries, the court heard.

It also heard evidence from ADCB that in late February NMC defaulted on a $1bn facility when it failed to make a $71m payment. This triggered another default concerning a $250m debt facility with ADCB and Standard Chartered Bank.

Mr Robins also claimed there were concerns that the group was struggling to pay debts and access cash to pay staff salaries and that it was suffering from “extremely serious cash flow difficulties”.

Mr Shetty, who has a stake of around 5 per cent in NMC, said in a statement he had been carrying out his own investigations and would make their findings known as soon as possible. “I am extremely eager and determined to bring to light the full facts,” he said.

NMC Health has been placed into administration by a UK high court judge who said that “something had gone very wrong with the management and oversight” of the company as he granted an application from creditors led by Abu Dhabi Commercial Bank.

Judge Sebastian Prentis said on Thursday he was satisfied that the healthcare provider was cash flow insolvent and granted ADCB’s application to have Alvarez & Marsal appointed as administrators.

NMC’s future has been uncertain in recent weeks since the Middle East-focused group found evidence of suspected fraud in its finances and reported previously undisclosed liabilities, which raised its net debt pile to $6.6bn. An independent investigation, following allegations of financial irregularities made by a US short seller last year, was commissioned by the healthcare provider and revealed unauthorised off-balance sheet financing.

ADCB has almost $1bn in debt exposure to NMC. Its application to the court was backed by other bank creditors including Barclays, which has a $146m exposure, Dubai Islamic Bank which is owed $541m, Abu Dhabi Islamic Bank which is owed $325m and Standard Chartered.

“It is clear that something has gone very wrong with the management and oversight of the company,” Mr Prentis said in reference to NMC’s series of public announcements on its finances since the start of the year, but added that allegations of fraud against the company were “just that”.

NMC was founded by Indian entrepreneur BR Shetty and is the biggest independent healthcare provider in the UAE, employing 20,000 people including 2,000 doctors.

“All hospitals, medical centres, care facilities and other operations in the group are not subject to the administration procedure, so their current activities will not change,” said Richard Fleming, managing director of Alvarez & Marsal Europe and joint administrator, who said the priority was to ensure patient care during the coronavirus pandemic.

Mr Prentis said the administration process would enable NMC to keep trading. Its lenders will put in place a funding agreement to keep the group operational in the short term, the court heard.

The group did not participate in the hearing but said in a letter read by the judge that, in the absence of creditor support, it was not in a position to oppose the administration. It added that neither the company nor the board accepted any allegations of wrongdoing.

Mr Prentis said he was satisfied that NMC met the legal test for being placed into administration for being “cash flow insolvent” after hearing from ADCB’s barrister Stephen Robins that the company had missed its February payroll payment date, although that obligation had now been met.

"I will make these findings known as soon as possible, and in the proper and appropriate manner."

absolute BS! That day will never come.

Thanks for all the honest answers. Here's an update, great response so far. Please keep passing it along.

https://www.surveymonkey.com/r/HZHXVSS

So far 45 replies:
1) 38 people invested during or after December 2019
2) 2.54 million pounds lost in total
3) Total of 198,152 shares held (0.09% of company)

Will give it a few more days and then please include this information in your emails to the lawyers/regulators/MPs etc.

Hamz - looks like it is a tenth of a penny because the price before was 938.40p, so now 0.10p... and not sure if this is an error, probably as no trades can go through during suspension... surprised how/why the ADR is still holding up.

Rastuss - who knows, the FCA has no spine anyway so you're right, not much use.

here's news of that $2bn loan which comprises most of the debt on the balance sheet : https://gulfbusiness.com/uae-healthcare-provider-nmc-raises-2bn-loan-say-sources/

and from the recent RNS: "NMC has a multi-tranche facility agreement relating to an original commitment of $2bn and certain other facilities which contain change of control provisions that are triggered if the Principal Shareholders cease to hold together, directly or indirectly, legally or beneficially, more than 30% of NMC's issued share capital, or shares having the right to cast more than 30% of the votes capable of being cast at general meetings of NMC. In the event of a trigger, unutilised commitments are cancelled and outstanding participations become due and payable if so requested by an individual lender (subject to not less than five business days' notice). NMC would also anticipate a reappraisal of its external credit ratings."

I guess technically ADCB's statement doesn't technically rule out that security was share certificates. But then most of Shetty and Butti's shares were sold? so how come the debt is so high? also ADCB did say "The credit extended by ADCB, which included syndicated loans alongside major global banks, was through senior unsecured facilities in line with common practice for a publicly listed company that also had issued a convertible bond and sukuk in 2018"

And yes, I can't quite believe it either, there's so much information we are missing. I'm determined to help out where I can and get to the bottom of this. If nothing, this is a good learning opportunity for us all and somewhat mentally stimulating/boggling.

Rastuss - there's definitely public information about the new debt facility of $2.1bn which was the rollover of previous debt and including and unused $400m facility (mentioned in previous RNS)

ADCB in their statement note: "The Bank has never provided unsecured loans to NMC’s principal shareholders.
The credit extended by ADCB, which included syndicated loans alongside major global banks, was through senior
unsecured facilities in line with common practice for a publicly listed company that also had issued a convertible bond
and sukuk in 2018" ... so again, why did ADCB never question why these "facilities" were never on the balance sheet?!

Also not sure that is true about FCA, they opened a formal probe into NMC, didn't they?