Published: Thu, February 13, 2020
Health Care | By Cedric Leonard

GKSD Investment Holdings to Bid to Buy NMC Health

GKSD Investment Holdings to Bid to Buy NMC Health

While NMC officials could not be immediately reached for comment on KKR's statement, the healthcare group's founder BR Shetty's spokesperson declined to comment on the developments when Khaleej Times contacted him.

NMC, which dismissed Muddy Waters's previous comments as "baseless", did not respond to a request for comment.

"As for the notion that NMC might receive private equity bids, it's hard for us to believe they would survive due diligence", he added.

The UAE-based NMC's board has asked its joint non-executive chairman Dr B R Shetty and vice-chairman Khaleefa Butti Al Muhairi to absent themselves from board meetings while their shareholdings in the company are reviewed.

Putting to end weeks of speculation surrounding buyout offers, NMC announced it had received "highly preliminary" approaches from United States private equity giant Kohlberg Kravis Roberts & Co LP (KKR) and Middle East and Africa-focused firm GK Investment Holding Group SA.

KKR said it has not made a proposal nor discussed with NMC the terms of any possible offer.

Muddy Waters published a report in December saying the health-care company's financial statements hint at potential overpayment for assets, inflated cash balances and understated debt.

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"Just when you thought it couldn't get any stranger, there are two new twists in the tale for the troubled hospital operator", said Russ Mould, investment director at stockbroker AJ Bell.

Two major shareholders launched a discounted share sale in NMC worth 375 million pounds.

Shetty owned 19.22% stake as of May past year, while NMC vice-chair Muhairi and Qebaisi had 15.82% and 7.66%, respectively, as of January 28, Refinitiv data showed.

The firm was this week plunged into fresh chaos after admitting it does not know how many shares are owned by founder Bavaguthu Raghuram Shetty, and that the market may have been misled over the size of his stake.

Muddy Waters has also renewed its offensive against the firm, which owns British hospital operator Aspen Healthcare but makes most of its money in the Middle East.

The board has also repeated its request for clarity from each of the shareholders in relation to the number of shares owned by them which are pledged, otherwise used as security in any form of financial instrument or are subject to other arrangements under which third parties (eg banks, financial institutions etc.) have the ability to sell those shares without prior approval from the respective shareholder, it said.

Finablr shares, also hit by the Muddy Waters allegations against NMC, were up 7.7% at 77.05 pence.

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