The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Adzy2k11 - totally agree with the sentiment of your statement below. Don’t think NMC is liable for the debt if the banks didn’t do proper due dipligence before lending billions to shetty and his dodgy partners. This will come out of suspension and will do well over the coming years! Will take time but will recover from this situation, especially, given the situation we are in due Covid19 right now.
“ if the lenders didn’t exercise proper due diligence and lent over $4.4bn in unsecured loans (on top of the official debt $2.1bn debt) for non group purposes, then that really is the banks’ own problem(s). If the loaned money was specifically spent on nmc then I can understand their claim to recover these loans. But Nobody has announced any such transactions which suggests it was mostly all siphoned off since June 2019... The fact that the banks have been so silent through all of this suggests to be they are probably a guilty associated party with these unauthorised loans and as such may not be expecting much back (otherwise you’d expect much more.”
https://m.khaleejtimes.com/business/local/shetty-says-nmc-in-safer-hands-under-new-chair
Shetty says NMC in safer hands under new chair
Issac John
Last updated on March 28, 2020 at 11.42 pm
(KT file)
B.R. Shetty, founder and former chairman of NMC Health, has said new chairman Faisal Belhoul is a seasoned investor in health and education sector andwill lead the group from the front.
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In an exclusive chat with Khaleej Times on Saturday, Shetty said NMC would be in safer and able hands under the leadership of Belhoul.
"I have no doubt that the future of NMC Health, which I had founded decades ago, will be safer and brighter in the hands of such a successful and pragmatic entrepreneur like Faisal, who has an excellent track record of accomplishments," he said.
Shetty said he is confident that NMC Health, the UAE's pioneering private-sector healthcare initiative and a homegrown global brand, will be able to tide over the current crisis with Belhoul at its helm.
"I have also advised some of the senior staff members of NMC, who had been in touch with me, to stay put and extend their full support to the new chairman to ensure that NMC tide over the critical phase and retain its status as a regional healthcare icon," Shetty said
BTW, bonds are up 25%:
NMC HEALTH (JE.) 18/25 CV Bond
22.53
4.60 (25.63%)
3/20/2020 BER
I raised a complaint with FTSE Russell re them using ADR price for index valuation and got a following response:
—————
The index price assigned to NMC of £1.11 is completely distinct from the London Stock Exchange (LSE) pricing
Ø FTSE Russell and the LSE operate as two distinct entities (although both are part of the London Stock Exchange Group)
Ø The OTC DR price is intended to serve as a temporary valuation proxy for index valuation purposes only (the LSE price is unaffected by the FTSE Russell index price)
Ø This was guided by consultation with clients, market participants, and the FTSE Russell advisory committees; and approved by the FTSE Russell Product Governance Board.
· If NMC Health resumes trading, the index pricing will immediately revert back to the LSE price of the ordinary line (again, the LSE price is distinct from the index price)
Ø Save exceptional circumstances, NMC will then be deleted from the FTSE 100 and concurrently added to the FTSE 250 with a minimum of two days’ notice.
o This is based on the close price on the rank date for the FTSE UK series review which occurred on the 03 March 2020
o This will not be re-evaluated once NMC resumes trading - assuming the LSE trading price remains satisfactory for FTSE 250 inclusion. FTSE Russell will review and confirm via an index notice once NMC resumes trade on the LSE
o Regardless, the OTC DR price will not be considered when evaluating any future index inclusion or exclusion decisions – again, the OTC DR price serves solely as a temporary valuation proxy for the purposes of the daily index calculation.
o Future FTSE UK series’ inclusion or exclusion decisions will be based on the LSE ordinary line price ONLY (and subject to all other inclusion criteria as detailed within the FTSE UK series ground rules).
· NMC will continue to be monitored in accordance with the Suspended Stocks’ guidelines (Section 4.18: hxxps://research.ftserussell.com/products/downloads/Corporate_Actions_and_Events_Guide.pdf).
Ø If NMC has not resumed trading after 60 business days, it will be removed from the FTSE Russell indexes altogether at the subsequent index review (refer to above guide for full detail)
o In this scenario, the removal price is typically set to zero; however if there is an alternative market-related value, this may be used instead
o The proposed removal price will be announced publicly providing an opportunity for users to opine
o As of today (19 March 2020) NMC has been suspended for 16 business days
· Finally for your reference, the FTSE UK series’ ground rules which details the process for evaluating index eligibility: hxxps://research.ftserussell.com/products/downloads/FTSE_UK_Index_Series.pdf
If you require any further details, please do not hesitate to contact us.
We are at least a month away for this coming out of suspension. Who knows where the world would be by then. Since we are all taking a creative license and just guessing, I would say it opens at £10 :). BTW, on ADR don’t worry, it will be up 100% later today, was up 72% the day before and down 54% yesterday. Fun and games!
Don’t do it, they are all ****!
Seems like some good news is on the horizon, ADR closed up 72% at $6 or £5 tonight.
Agreed totalquant and the biggest one MW was wrong about is Stroer, just goggle it!
You and your shorting arse would really like that won’t ya Rastuss or shall I just call you RAT (you make me sick!!). Keep dreaming, it’s not going to happen and keep paying interest on them shorted shares till this comes out of suspension in a few months time and open UP, especially after all this mess is cleared up in the coming months! NMC is nothing like FIN, this is a solid growth healthcare business that UAE and world needs in desperate times like these.
Exactly! Debt and asset values can be easily manipulated but not the revenue and the fact that millions of people are being treated YOY at NMC hospitals in 20 countries. I really do hope it all works out for the shareholders here!
Totally disagree Mick and Franalex - NMC and FIN are two very different beasts. UAE can live without foreign exchange company but not the largest healthcare group in the ME. FIN was already in loss and reported ~$200M in loss whereas NMC is a very profitable healthcare business that reported income of over $350M last year.
We will mate, keep the faith!
Yes, there is! I still feel all is not over yet. These will trade again and recover! Only time will tell! Things could really turnaround here, new board, CEO, rescue by Mubadala and UAE gov, debt liability lies with shetty and Butti’s, takeover bid from one of the 4 interested parties since mess clears. If board didn’t know anything of it and didn’t approve it, and most likely shetty and his buddies used that money to fund other companies and fill their pockets, how is this debt legal??? Don’t think NMC is liable for it, it’s a fraud and surely they need to sell Shetty and Butti’s other companies/assets and payback the banks that money. Also, why would lenders lend such a huge amount without proper due diligence and board approval??
Meanwhile this happened!
——————————————-
Dear Sir/Madam,
We refer to your email of 16 March 2020 setting out your complaint as to FTSE Russell using the OTC Depository Receipt price of NMC Health PLC (UK) (“NMC Health”) to determine where NMC Health would appear in FTSE indexes in future. We write to confirm that FTSE Russell does not propose, and does not intend, to do this.
Pursuant to the FTSE Russell notice of 4 March 2020, FTSE Russell advised that NMC Health fell out of the prescribed eligibility criteria for the FTSE 100 based on its (LSE) last exchange traded price, and accordingly would be included in the FTSE 250. This determination was made in accordance with the published ground rules which govern the FTSE UK Index Series:
https://research.ftserussell.com/products/downloads/FTSE_UK_Index_Series.pdf.
FTSE Russell subsequently issued a notice of 13 March 2020 which confirmed that if and when NMC Health resumes trading, it will be removed from the FTSE 100 and included in the FTSE 250 at its (LSE) last exchange traded price. NMC Health will continue to be monitored in accordance with FTSE Russell’s published Suspended Companies' rules: https://research.ftserussell.com/products/downloads/Corporate_Actions_and_Events_Guide.pdf.
At no point will the OTC Depository Receipt price be used to evaluate index membership within the FTSE UK index series.
We hope this response provides you with some important background and additional context which addresses your concerns.
If you require any further details, please do not hesitate to contact us.
Don’t think so Deos. Reposting John d’s post for yesterday! I Think option 1/2 are most likely but option 3 is a possibility too!
M
Possible Case Arguments - Best to Worse:
Case 1.
The fraudulently obtained (undisclosed) debt gets written off, NMC not liable. NMC are exonerated of all wrong-doing. The F.Y. 2019 results are good (as expected). Following the 2019 results the share suspension is removed end of April/early May and we see an immediate increase in share price on opening. The financial press and media are all over this. Expecting the share price to close around 1600p within 2-3 weeks of trading on FTSE250. Promoted back to FTSE100 before year end.
Case 2.
Let’s assume that a majority of this undeclared debt was used to finance non-group businesses, namely Shetty’s other business interests. Let us also assume that legally the debt obligation lies with NMC. BRS Ventures has a number of other businesses held withing the “holding” company; Neopharma, Nexgen Pharma, BR Life [Hospitals] and many others. If this is proven to be fraud then could BRS Ventures’ assets be transferred to NMC ownership? Would BR Life compliment NMC? If the FCA pass this matter onto the Serious Fraud Office (SFO) then they will attempt to recover any assets from those committing financial crimes/fraud. NMC could still have to carry $5 billion of debt on the balance sheet but would have a larger asset base and bigger combined revenues and profits.
Case 3.
Recover some of the undisclosed fraudulent debt (Dr Shetty and his co-accused are not short of wealth), carry a larger long-term debt on the balance sheet: Allow Dubai-based Bahraini billionaire Mishal Kanoo (Mubadala Investment Company) to buy a seat on the board. Bring in a solid top-notch board of directors and carry on. The share price has fallen 76% so some of the damage (may be not all) has been priced in.
Case 4.
Let us assume that NMC’s [estimated] debt stands at $5 billion. Debt isn’t an issue as long as that debt can be serviced and the day-to-day operations can be financed from revenues. We’re not aware that this is not, or would not be the case going forward. Sure, there would be no further growth/expansion for many, many years but the business may be able to carry on. Will further hammer share price and will probably never recover its true value.
Case 5.
NMC goes into administration, gets bought out on the cheap. We, shareholders get zero.
The FCA (Financial Conduct Authority) pass the matter to the Serious Fraud Office
“Chartered” Accountants (ICAEW, ACA, ACCA, et. al.) reputations are damaged for years
Financial Conduct Authority gets overhauled (again)
Ernst & Young get massive fine
Banks and bankers involved get fined
Shetty and co-conspirators receive large fines and jail sentences
Muddy Waters/Carson Block get shutdown for insider trading
Case 6.
NMC goes into administration, gets bought out on the cheap. We, shareholders get zero (total loss) and the ones wh
I still feel all is not over yet. These will trade again and recover! Only time will tell! Things could really turnaround here, new board, CEO, rescue by Mubadala and UAE gov, debt liability lies with shetty and Butti’s, takeover bid from one of the 4 interested parties since mess clears. If board didn’t know anything of it and didn’t approve it, and most likely shetty and his buddies used that money to fund other companies and fill their pockets, how is this debt legal??? Don’t think NMC is liable for it, it’s a fraud and surely they need to sell Shetty and Butti’s other companies/assets and payback the banks that money. Also, why would lenders lend such a huge amount without proper due diligence and board approval??
Any thoughts on this??
CLASS ACTION:
- is there any point?
- can you join the US class action if you are based in the UK?
-if you bought and sold stock multiple times before it was suspended and lost money, is there any point putting in original price in the form or do they divi up the money based on number of units you actually hold?
- can you join multiple class actions or only one?
- do we need to pay the lawyers anything or do they take it from the company settle if there is any?
All serious responses welcome!
The Russel announcement is irrelevant. It is just about what index it might be in depending on value when / if it resumes. Nobody knows when or if it will trade again or what price. It all depends on how things develop over the coming weeks!
NMC HEALTH PLC/ADR
OTCMKTS: NMHLY
OVERVIEW
COMPARE
Finance
4.20 USD +2.80 (200.00%)
13 Mar, 11:20 GMT-4 ·
Thanks MRD. @Others - thoughts on any of the other questions below?