Kuwait International Bank agrees to sell NMC Health debt

The Kuwait International Bank is recovering some of the money owed to it by NMC Health, the health group founded by BR Shetty and placed under administration last year, by selling its debt.

The lender owes NMC Health $ 74.11 million, but has agreed to sell the debt for $ 13.25 million, the company said in A declaration at Boursa Kuwait, where its shares are traded. He did not disclose the buyer’s name and said he had “fully funded” the debt exposure in last year’s accounts.

“The sale will be disclosed once completed and all relevant proceedings have been completed,” KIB said.

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The problems at NMC Health, which grew from a single clinic to the UAE’s largest healthcare provider, began after a report from short seller Muddy Waters in 2019 accused the company of inflating its assets and to underestimate its debt. An independent investigation following it revealed more than $ 4.4 billion in previously unreported debt and the company went into receivership in April of last year.

In a update to lenders in April, the director of the company, Alvarez & Marsal, said they have received about $ 6.4 billion in claims from creditors to date, including about $ 6.3 billion from a group of 136 financial creditors.

An additional $ 650 million debt from 10 other major financial creditors was still unpaid and had to be filed by the end of April deadline.

Creditors are expected to vote on the future of NMC Health on June 15. The directors are proposing a lender-led restructuring of the group that would reduce its debt to $ 2.25 billion in exchange for exit instruments that could be cashed at a future date once the company returns to growth and generates more value.

The proposal needs the support of more than 50 percent of unsecured creditors. If this is not achieved, a distressed sale or liquidation would take place. A distressed sale “is likely to generate significantly less recovery than a restructuring,” the directors said, while liquidating the business would result in “little or no recovery” for most of the company’s creditors.

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