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One of the people close to Mr Shetty said that the company should strengthen its corporate governance procedures depending on the outcome of the independent investigation carried out by Mr Freeh.

“If there are lapses, it is important that we work together with other shareholders to remedy any such governance failings,” the person said.

This is from the FT - might explain the US move to $14.75 = £11.35 ! Good news for tomorrow then. Glad I added more today!

The founder of NMC Health is looking to buy out his Emirati partners and return to an “active leadership position” at the embattled hospital group, according to people briefed on his plans.

The 77-year-old Indian-born entrepreneur BR Shetty is conducting an operational review of NMC ahead of formal talks to explore various options with shareholders and regulators, these people said.

Shares in NMC, which owns and operates hospitals in the Middle East, have fallen more than 60 per cent since short-seller Muddy Waters last year questioned its asset values, cash balance and debt levels. The claims have been rejected by NMC, which has appointed former FBI director Louis Freeh to carry out an investigation into the allegations.

Mr Shetty stepped down as NMC’s chief executive in 2017 but remains one of the largest shareholders with a 15 per cent stake. On top of the NMC share price decline, he has also been hit by a sharp decline in the value of his other main business, financial services group Finablr, which has fallen more than 60 per cent in the past few weeks.

One person briefed on Mr Shetty’s strategy said the businessman had made the Abu Dhabi government aware of a potential plan that may include bringing in new investors to buy the shares owned by Emirati investors Saeed al-Qebaisi and his relative Khalifa al-Muhairi, who control a stake of about 24 per cent in NMC.

Last month the pair sold £375m of their shares to repay debt owed to Deutsche Bank and Credit Suisse to meet margin calls as the stock price collapsed, reducing their stake in the company.

“BRS wants to take an active leadership position,” said one person close to Mr Shetty. “We will support what others decide and try to reach a consensus.”

A spokesman for Mr Muhairi, who is executive chairman at NMC, said: “Khalifa remains committed to the financial success of NMC as a business. Given the ongoing investigation he is unable to comment at this time.”

Private equity firms, including Apollo, have previously considered taking a stake in NMC, according to two people familiar with the situation. Apollo declined to comment.

Bankers are sceptical about Mr Shetty’s ability to fund any transaction, saying he would need financing to raise his stake in the FTSE 100 company he founded in 1975.

Finablr was affected by the Muddy Waters attack given it has a similar shareholder base to NMC. Its Travelex currency business was also the target of a cyber attack that forced it to shut down over the new year. Finablr came under further pressure last month when it disclosed that more than half of its stock had been used as security when buying the currency platform in 2015.

But the people familiar with Mr Shetty’s plans point out that he has retained his stake in the healthcare group throughout its recent crisis without having to sell any NMC shares.

One of the people close to Mr Shetty said that the company should strengthen its corporate governance procedures dependi

Closed period is two months before annual results, so they’ve not been allowed to buy since January 5th

Just filling my boots, Tina, babe

I agree with you, that’s why I am long from £8.86 (5k shares)and £9.55 (3k shares), despite actually being bearish on this. I just think unless it’s outright fraud it’s probably been discounted enough. I have hedged with an OTM put @ £5 strike. I don’t expect everything to be clean, but I think the market already knows that.

P.s. my £31.50 target was sarcasm, but I’ll stick with it!

guidance starts at 2h 29mins.

should watch this:

https://nmc.ae/investor-relations

under conference call playbacks - capital markets day 2019

why are you posting old news? this didn't materialise, and when asked on the results call NMC clearly stated that they routinely receive interest, and would not confirm it then. If it was real, they would have had to state it.

anyway - my 955p add is looking ok now!

you need to pay or have bloomberg/factset. can't redistribute.

and this:

Insider Compensation is Short-Termist and Misaligns Incentives
NMC’s executive compensation targets are based largely on Adjusted EBITDA and Adjusted EBITDA margins. This incentivizes a rapid clip of deal-making, to the detriment of cash-based, per-share metrics, which would, in our view, be a more effective barometer of the business’s growth. For example, between 2012 and 2018, Adjusted EBITDA grew at a CAGR of 35.3%, against 27.1% for net income. Meanwhile, net income as a percentage of Adjusted EBITDA declined from 75% to 52% over that period. We suspect that NMC’s Saudi Arabian JV and the resulting minority interests will only increase the difference between Adjusted EBITDA and net income—and increase the boost management gets from being compensated on Adjusted EBITDA. Meanwhile, NMC executives have maxed out all of their financial incentive targets, as well as their nonfinancial incentive targets, like JCI accreditation, in recent years.

yeah the whole governance structure is super dodgy.

Significant Corporate Governance Failings at NMC
Shareholders, Management, and the Board – Conflicted and Misaligned Incentives
Page 30 of 34
Insiders own 55% of NMC shares. 17.4% is owned by Saeed Bin Butti, 14.7% is owned by
Khalifa Bin Butti, and 7.3% belongs to joint Bin Butti vehicle Infinite Investments, while BR
Shetty owns 15.9%.
Some of the “independent” directors appear to us independent in name only. Abdulrahman
Basaddiq is a former Ernst & Young country partner who is on the board of Shetty-controlled
Finablr. Thus, we do not believe he is truly independent. Jonathan Bomford, meanwhile, is also
a former Ernst & Young partner, and he also serves on the Finablr board. These NMC directors
remind us of the board of Sino Forest, which we once called “the retirement plan for former
Ernst & Young partners”.55 (In our view, the cozy relationship between these former EY
partners and Sino-Forest’s then-auditor – EY – contributed to a lack of rigor in the audit.)
Other current and former members of the board also exhibit strong ties to the controlling
shareholders of NMC. Ayesha Abdulla was previously CEO of Dubai Healthcare City, which
launched Shetty’s BR Medical Suites. Ex-board member Dr. Nandini Tandon even describes
BR Shetty as a mentor and co-founded Tenacity Group with Shetty.56 Despite her ties to NMC’s
founder, she resigned from the board in February 2019 “with immediate effect.57
Despite these entanglements, NMC Group’s controlling shareholders claim their relationship
agreement “includes provisions to ensure the Board remains independent.”58,59
Meanwhile, the Chair of NMC’s Audit Committee, Lord Meade, has no apparent accounting
experience. He was Chairman of Eurasia Drilling, where he recommended a buyout by the
majority oligarch shareholders while sitting on the board of another of the buyers’ portfolio
companies, Soma Oil & Gas.60 Soma Oil & Gas was itself subject to a Serious Fraud Office
investigation into alleged bribery and corruption in Somalia.

Management and insiders have been selling staggering quantities of shares
In the past two years, we estimate insiders have monetized £1 billion, net, via selling, collaring,
and pledging stock. Of this, £45 million was outright share sales by insiders. We calculate that
BR Shetty realized an approximate £250 million from the collar transaction he put on his shares.
And finally, Khalifa Bin Butti and BR Shetty’s share pledges approximated £700 million.

I just listened back to the conference call from 1H results. The CEO quoted that the share price then in august (23 pounds) was a huge disconnect from the progress they see on the ground and as such they would engage in a $200m buyback on an "opportunitistic basis".

here is the full extract from December:
"The Buyback Programme will be subject to certain pre-set parameters and any purchase of Shares will take place during the period commencing on 18 December 2019 and ending no later than the earlier of the conclusion of the annual general meeting of the Company in 2020 and 30 June 2020, including during any closed period of the Company which may fall within that period. The maximum number of Shares that will be repurchased pursuant to the Buyback Programme is 20,890,386."

Now they are in a 60 day closed period until results in early March, so understandably no buyback, but it just means they will have roughly 115 days (till 30 June) to purchase the remaining 20m of shares - which is around 174K shares per day. The average daily volume is around 2m/day over the last 3 months, so the can probably get away with it at 10% of ADV. But that's still substantial. If volume goes back to the 12 month average (600k/day) thats a whopping 30% of ADV they will be hoovering up after results. That's significant.

I however suspect they may be forced to cancel the buyback after the Freeh findings (if cash isn't what it seems).

we do know their guidance. look it up.

H1 2019*
Revenues = 1,236.0m
EBITDA = 323.5m
EBITDA margin = 26.2%
Net income to equity holders = 138.1m
EPS (US$m) - Basic 0.66
Net debt-toEBITDA = 3.4x

FY 2019 guidance
Revenues = 2,500-2,540m
EBITDA = 665-675m
EBITDA margin = 26.2%
Net income to equity holders = 297-305m
EPS (US$m) - 1.52
Net debt-toEBITDA = 3.4x

Tinatits - first of all, i'm not deramping, as stated I am actually long. sy
Secondly, and as I've stated before, you need to read the Jefferies analyst James' previous research. It's all in there. I don't need to repeat.

the market doesn't believe the company and its comments of results in line with expectations... so it's being priced with a huge discount given the possibility of fraud... such companies usually trade at a 50% discount to intrinsic value... so 9-10 pounds is around fair value given the uncertainty... i also don't trust the management, and do expect some bad findings from this all, but it's all about the price you pay, i guess. i have also hedged my position just incase it's outright fraud with put options with strike price at 500p.

955p* sorry.

lol, it's pointless watching the share price now if you don't plan to sell. just come back in a month and decide then.
i added abit more at 855p.

Minimum? Or lowest? There’s a big difference between the two words!

Krupa Global Investments (KGI) spoke with NMC management representatives and agreed on meeting with CEO Prasanth Manghat in the upcoming weeks. Management representatives of NMC explained all questions that KGI had regarding Muddy Waters report and future growth and prospect for company.

KGI had positive conference call with NMC management representatives few days ago. KGI requested further explanation on issues regarding cash reserves, debt and purchases of certain properties in UAE mentioned in Muddy Waters report. NMC re-iterated previous statements that these allegations are not true and independent review is in process with supervision from Louis Freeh, former federal judge and FBI director. KGI has previously suggested to establish independent committee to solve this issue in its press release of December 27, 2019 and therefore we appreciate the appointment of Mr Louis Freeh to review Muddy Waters allegations.

NMC assured us that review is clearly independent and members of committee only ask questions and request documents from middle and top management representatives and do not share any other conversations or relationships. Results of independent review should be known in upcoming weeks prior to the announcement of FY19 results.

We agreed that KGI’s chairman Pavol Krupa and partners will meet NMC’s CEO Prasanth Manghat
to discuss these issues in more depth in the upcoming weeks. NMC will show us their new facilities
in Abu Dhabi.

NMC Health is well positioned to gain market share in Gulf region mainly in Saudi Arabia and increase their penetration in UAE and UK. In our opinion, further growth will be led by huge capacities in their hospitals and profitable distribution channels, when this crisis fades away. Several analysts are considering NMC shares as deeply undervalued (JP Morgan with target price 3,360 GBP, Barclays with target price 4,275GBP). KGI agrees with them.

Krupa Global Investments holds 1m shares of NMC Health.