ADGM Joint Administrators' Proposals
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N M C ROYAL MEDICAL CENTRE LTD NEW MEDICAL CENTRE PHARMACY LTD (AL AIN) NEW MEDICAL CENTRE PHARMACY LTD (SHARJAH) EVE FERTILITY CENTER LTD SUNNY HALWAN SPECIALITY MEDICAL CENTRE LTD SUNNY MAYSLOON SPECIALITY MEDICAL CENTRE LTD SUNNY SHARQAN MEDICAL CENTRE LTD All in administration (each a “Company”, and together referred to as the “Companies”) Joint Administrators’ proposals 19 November 2020 © Alvarez & Marsal Europe LLP. See Notice:About this statement of proposals. All rights reserved. Contents 1 Executive summary ........................................................................... 2 2 Group Structure ................................................................................ 5 3 Background and events leading to the administration ....................... 6 3.1 Background information .......................................................................................................... 6 3.2 Funding and financial position of the Companies ................................................................... 6 3.3 Events leading to the administration ....................................................................................... 6 3.4 Pre-administration work .......................................................................................................... 7 3.5 Appointment of Joint Administrators ....................................................................................... 9 4 Strategy and progress of the administration to date ........................ 10 4.1 Strategy to date ..................................................................................................................... 10 4.2 Asset realisations .................................................................................................................. 13 4.3 Costs ..................................................................................................................................... 15 4.4 Ongoing strategy ................................................................................................................... 15 5 Dividend prospects .......................................................................... 16 5.1 Secured creditors .................................................................................................................. 16 5.2 Preferential creditors ............................................................................................................. 16 5.3 Unsecured creditors .............................................................................................................. 16 6 Ending the administration ................................................................ 17 6.1 Exit from administration ......................................................................................................... 17 6.2 Discharge from liability .......................................................................................................... 17 7 Approval of proposals ..................................................................... 18 7.1 Initial creditors’ meeting/Conduct of business by correspondence ....................................... 18 7.2 Resolutions ............................................................................................................................ 18 7.3 Request for a creditors’ meeting during COVID-19 .............................................................. 18 8 Joint Administrators’ remuneration, disbursements and pre- administration costs .............................................................................. 20 8.1 Approval of the basis of remuneration and disbursements ................................................... 20 8.2 Pre-administration costs ........................................................................................................ 20 Appendix 1 – Statutory information and facilities operated .................... 21 Appendix 2 – Receipts and payments account ..................................... 27 Appendix 3 – Charging and disbursement policy .................................. 28 Appendix 4 – Estimated financial position ............................................. 30 Appendix 5 – Glossary ........................................................................ 120 Appendix 6 – Notice: About these proposals ....................................... 121 1 © Alvarez & Marsal Europe LLP. See Notice:About this statement of proposals. All rights reserved. 1 Executive summary Overview Richard Fleming and Benjamin Cairns of Alvarez & Marsal Europe LLP (“A&M”) were appointed as Joint Administrators (“we”/”our”/”us”) of the seven Companies listed at Appendix 1 on 27 September 2020 by order of the Commercial and Civil Division of the Abu Dhabi Global Market (“ADGM”) Courts, pursuant to the ADGM Insolvency Regulations 2015 (“IR15”). The Joint Administrators were also appointed as Joint Administrators over a further 29 entities within the NMC Group on the same date. Please note that the proposals in respect of the additional 29 entities have been prepared separately. Events prior to administration The Companies were not originally incorporated in the ADGM, and therefore to enable the appointments to occur, the Companies were continued (re-domiciled) into the ADGM on 14 and 15 September 2020. The form of each of the Companies changed from a limited liability company (“LLC”) registered in onshore United Arab Emirates (“UAE”) to being a private company limited by shares (“LTD”) registered in the ADGM. The Companies’ legal names consequently changed to reflect the change in form and the board of directors was re- constituted with the addition of non-executive directors. Although the Companies are now registered and head-quartered in the ADGM, the ongoing business and operations of the Companies have not changed and are being conducted onshore in the UAE through their branches. The ADGM entities each have a commercial licence in the ADGM and branch licences in the UAE have been applied for. Our appointment to the Companies has taken place subsequent to the insolvency of their ultimate parent company, NMC Health Plc (“PLC”), which was placed into administration on 9 April 2020 by Order of the English Court. For the purpose of these proposals, PLC and its subsidiaries shall be referred to collectively as the “NMC Group”. The appointment of administrators to PLC followed the discovery of between USD 4.4 billion and USD 5.4 billion of debt across the NMC Group that was undisclosed in its financial statements. Upon appointment, the PLC administrators sought to stabilise the NMC Group, but the Companies came under mounting pressure as a result of legal actions being taken by various parties in the UAE courts. In light of the creditor pressure, it became apparent that they required the protection of a bankruptcy filing as soon as possible. A number of potential bankruptcy regimes were assessed but ultimately it was decided that the administration regime within the ADGM would be the most effective option, given that it would provide both a moratorium on claims (which would be recognised in the UAE onshore courts) and had features that allowed new finance to be raised on a priority basis (being a key consideration for lenders into the administrations). Additionally, the new funding required to support ongoing trade and preserve value was not available to the Companies outside of an ADGM administration process. In short, the appointment of administrators to the Companies was necessary to enable the new funding required to trade the Companies and to trigger moratorium protection from creditors whilst a restructuring occurs. There are on-going legal actions against some of the Companies which were commenced before our appointment in the Dubai International Financial Centre (“DIFC”) and onshore courts. In order to stay these proceedings in these jurisdictions (and give effect to the moratorium), we are seeking recognition of the administration order through applications to the relevant onshore and DIFC courts. 2 © Alvarez & Marsal Europe LLP. See Notice:About this statement of proposals. All rights reserved. Companies’ operations and funding The Companies provide a range of healthcare and related services in the UAE, which includes hospitals, medical clinics and pharmacies. They form part of the largest private provider of healthcare in the UAE. The Companies operate 9 facilities, including clinics and pharmacies and approximately 155 employees. The Companies continue to trade whilst in administration to allow continuity of care to be maintained at the facilities and to preserve value for creditors. To enable these seven companies and the 29 companies we were also appointed as administrators over (together the “ADGM Companies”) to continue trading, immediately after appointment we entered into an AED 2,387,125,000 (USD 650 million) administration funding facility (the ”AFF”). The AFF is required to provide sufficient liquidity for the ADGM Companies to continue to trade whilst a restructuring plan is enacted. Future strategy Our primary strategy is to restructure the Companies and to exit the administrations through a plan of reorganisation. The plan of reorganisation is being developed in conjunction with our advisers. In the event that a plan of reorganisation is not achievable, a sale of the business is also being considered To support the restructuring or a sale of the business, a three year business plan has been produced, a summary version of which is available on the NMC website.