NMC Health’s (NMC) attempts to rehabilitate its image following the Muddy Waters short attack has been dented by a major sale by its largest shareholder.
Saeed Mohamed Al Qebaisi, who held 21 per cent of NMC, and Khalifa Butti Al Muhairi have sold a combined $490m (£374m) in shares at 1,200p apiece. A bookbuilding process was implemented because of the sale transactions, and was completed on 7 January. Mr Al Qebaisi now holds 12.5 per cent of the shares in issue and is locked into holding that stake for 360 days, along with another 7 per cent held jointly with Mr Al Muhairi through another vehicle.
NMC's shares were down 15 per cent on the news, to 1,274p. The company said the sale was undertaken to reduce debt at the holding company: “[It] pertains only to the means of financing the investors' shareholdings and not to the company's operating performance nor long-term prospects,” NMC said, although sales of this magnitude were bound to set tongues wagging.
The Middle East-based hospital owner and operator is struggling after Muddy Waters released a report in December attacking its balance sheet practices, and related party declarations, and accused the company of overpaying for assets. NMC has denied these accusations, accusing Muddy Waters of getting things wrong and distorting other figures, but set up a board committee to verify its cash balances. The company has called this an independent investigation but Muddy Waters alleges the director named as chairman of the committee, Jonathan Bomford, is too closely involved to be truly independent.
Mr Bomford serves on NMC’s audit committee, but used to work for NMC's auditor EY. He has served on the board of Travelex, owned by NMC's chairman, Dr BR Shetty, the founder of the holding company Finablr (FIN). Mr Al Qebaisi and Mr Al Muhairi also sold off $75m of their combined holding in Finablr this week. Its share price fell 16 per cent on the news, capping off a week in which the company announced it had been hit by a ransomware attack on New Year's Eve, which put Travelex’s online systems out of action.
