NMC Healthcare and DIB reach out-of-court settlement

UAE-based hospital operator NMC Healthcare and Dubai Islamic Bank have signed an out-of-court settlement to resolve all ongoing and pending legal disputes between them and any associated third parties.
NMC Healthcare had crashed after a report from short seller Muddy Waters in December 2019 alleged that the company had inflated the value of its assets and understated its debt. An independent investigation into the company uncovered more than $4.4 billion of previously unreported debt, leading to the company being placed into administration in April 2020.
NMC and DIB on Tuesday said they have reached a global settlement agreement, resolving the disputes that arose from the old NMC Healthcare’s entry into administration and restructuring.
While the terms of the deal, including the settlement value, were not disclosed, under the agreement, DIB will receive a cash consideration and Holdco notes to settle certain claims, according to a joint statement.
These notes were issued to legacy creditors as part of the restructuring process that took place in The Abu Dhabi Global Market (ADGM) in September 2021.
By receiving the Holdco notes, DIB will become an economic owner of NMC Holdco, NMC Healthcare’s new holding company, the statement said.
All parties involved have agreed to discontinue any ongoing legal action or proceedings against each other, with no admission of liability.
“This amicable settlement and resolution is to both parties’ mutual benefit, enabling NMC to remain focused on providing vital healthcare services to millions of patients across the UAE annually,” NMC and DIB representatives said.
“NMC looks forward to working in close partnership with DIB once more, and DIB looks forward to working with NMC as a supportive and valued stakeholder.”
NMC Holdco owns the restructured NMC operating companies through its wholly owned subsidiary, NMC Opco, which owns and runs 85 healthcare facilities in the UAE and the Middle East region.
In 2022, the restructuring process was completed and allowed 34 NMC companies to exit administration and become subsidiaries of a new group.
Last year, a lawsuit was filed against NMC founder B R Shetty and its former chief executive Prasanth Manghat in a $4 billion case alleging fraud.
Legal claims were filed in the UK and Abu Dhabi against Mr Shetty, Mr Manghat and the Bank of Baroda, Richard Fleming, managing director of Alvarez & Marsal Europe and joint administrator of NMC and NMC Healthcare, told The National at the time.