NMC Healthcare’s USD 7 Billion Financial Restructuring

In UK Clifford Chance, Quinn Emanuel Urquhart & Sullivan, advised on the matter.

Clifford Chance advised NMC Health PLC – ad hoc creditors’ committee with a team including Daud Khan (Corporate M&A), Paul Coates (Restructuring & Insolvency), Iain White (Picture – Restructuring & Insolvency).

Quinn Emanuel Urquhart & Sullivan advised NMC Health with a team including Richard East (Restructuring & Insolvency), Nick Marsh (Restructuring & Insolvency), Karabeth Ovenden (Restructuring & Insolvency).

The USD 7 billion financial restructuring will see the operating group exit from administration under the Insolvency Regulations of the Abu Dhabi Global Market (ADGM) pursuant to deeds of company arrangement. This is a landmark transaction for the region and the first time that either procedure has been used in ADGM.

NMC is the largest healthcare provider in the UAE, and was formerly a member of the FTSE 100. In early 2020, just as the Covid-19 pandemic was beginning, it emerged that the group had underreported its liabilities by over USD 4 billion, and that as a result the group was heavily insolvent.

The transaction has separated the operating part of the group from its former holding company, NMC Healthcare Ltd, and its previously-listed parent, NMC Health plc. These entities will remain in insolvency to pursue litigation claims. The operating group has exited administration, and benefits from a balance sheet cleansed of approximately USD 6.7bn of pre-insolvency debt, with an additional AED 1.29bn (approximately USD 350m) new money facility provided by a syndicate of lenders and underwritten by certain members of the committee. Creditors will receive participations in an innovative USD 2.25bn profit participating loan facility owing from a new holding company for the operating group, with the option to elect for conventional or Islamic commitments. The new facility benefits from shareholder-like governance controls in respect of the restructured group.

ADGM is a common law jurisdiction in the United Arab Emirates, and the administration and deed of company arrangement procedures are based on equivalent procedures under English and Australian law respectively, allowing Clifford Chance to draw upon its deep experience with each of those regimes, as well as its understanding of regional nuances.

The deal team was led by London restructuring partner Iain White (Picture) and senior associate Tim Lees; London and UAE corporate partners Daud Khan and Mike Taylor; and UAE finance partners Nicola Reader and Qudeer Latif, and included Sarah Jane O’Leary and Michael Panayi (restructuring, London); James Dadford and Ahmed Shafiek (corporate, UAE); Millecent Smit, Krish Mistry, and Sarah Boyd (corporate, London); Bola Coker, Anthony Matsis, and Nadia Mardan Ali (finance, UAE); Paul Coates (litigation, UAE); Giles Allison, Lyle Risk, and Murray Tabeart (litigation, London) and Jack Hardman (regulatory, UAE).

The Quinn Emanuel team was led by London partners Richard East, Nick Marsh and Karabeth Ovenden.

Involved fees earner: Giles Allison – Clifford Chance; Paul Coates – Clifford Chance; Bola Coker – Clifford Chance; James Dadford – Clifford Chance; Jack Hardman – Clifford Chance; Daud Khan – Clifford Chance; Qudeer Latif – Clifford Chance; Timothy Lees – Clifford Chance; Anthony Matsis – Clifford Chance; Krish Mistry – Clifford Chance; Sarah Jane O’Leary – Clifford Chance; Michael Panayi – Clifford Chance; Nicola Reader – Clifford Chance; Ahmed Shafiek – Clifford Chance; Millecent Smit – Clifford Chance; Mike Taylor – Clifford Chance; Iain White – Clifford Chance; Richard East – Quinn Emanuel Urquhart & Sullivan; Nick Marsh – Quinn Emanuel Urquhart & Sullivan; Karabeth Ovenden – Quinn Emanuel Urquhart & Sullivan;

Law Firms: Clifford Chance; Quinn Emanuel Urquhart & Sullivan;

Clients: NMC Health; NMC Health PLC – ad hoc creditors’ committee;

Author: Giulia Di Palma