The largest private healthcare network in the United Arab Emirates, NMC Health, has identified an additional $2.7bn (£2.1bn) in previously undisclosed facilities that had not been approved by its board.
This development, along with the $2.1bn of debt the group reported in June 2019, means that NMC Health now has roughly $5bn of debt.
“The work on verifying this figure is ongoing,” according to a NMC Health statement dated March 10.
According to research firm Muddy Waters, the group may be running on zero cash.
In a statement, the company said it “is continuing to work with its advisers to understand the exact nature and quantum of the undisclosed facilities. The board believes that some proceeds may have been utilised for non-group purposes.”
The UK’s Financial Conduct Authority (FCA) launched its own investigation into the company in February, suspending the FTSE-100 company’s stock movements on the London Stock Exchange on February 29. Trading is still suspended as of March 10, but when it resumes, it will be regulated to the FTSE 250 Index.
In January, NMC’s CEO and five board members left the company. At the same time it was discovered the company had used $335m (£259.5m) of secret financing arrangements. Its chief financial officer, Prashanth Shenoy, has been granted extended sick leave.
Before the additional debt was discovered, the group asked banks to informally hold $2bn of debt, as PwC comes on board for liquidity management, according to Gulf Business.
Investment bank Moelis has also been hired to handle debt restructuring.
Muddy Waters suggests that NMC Health would have used its debt to inflate stock prices, which could have been used as collateral for debt.
NMC Health also ran into trouble at the start of the month amid reports that it could not fulfil payroll for February, but this has since been completed.
An FCA spokesperson confirmed the investigation but could not comment on the matter. NMC Health and PwC did not respond to comment prior to publication.