NMC Health provide statement on Possible Offer

NMC Health provide statement on Possible Offer

In a separate release, the company also said a review of its shareholders suggests that the size of the stakes of chairman Bavaguthu Raghuram Shetty's and other investors have been incorrectly reported.

In a statement, the Italian company GKSD confirmed that its Middle East and Africa-focused firm GK Investment Holding Group (GKI) is acting as its adviser on the buyout and made the approach on its behalf and that GKSD is in the preliminary stages of considering an offer for NMC.

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.

However, the statement added that the "announcement does not amount to a firm intention to make an offer and accordingly there can be no certainty that an offer will made, nor as to the terms on which any offer will be made".

NMC Health Plc disclosed preliminary buyout approaches from private equity firms KKR & Co Inc and GK Investment on Monday, lifting its shares, which have dropped dramatically since Muddy Waters previous year queried its financial statements.

The largest private healthcare company in the United Arab Emirates said its co-chair and founder BR Shetty stepped back from its board after informing NMC of potentially inaccurate reporting of his holdings. Ludo Bammens, a spokesman for KKR, wasn't immediately available for comment.

NMC Health shares took a hit back in December, when USA short selling firm Muddy Waters accused NMC Health of manipulating its balance sheet to understate debt, which the company firmly denied. The company has said the allegations are false and misleading. NMC's $107 million redevelopment of NMC Royal Women's Hospital in Abu Dhabi "contains numerous red flags", the short seller said.

After Muddy Water's critical assessment was publicly disseminated, along with the news that the hedge fund had taken a short position in the shares, the shares have plunged more than 70%, forcing major shareholders to sell stock to cover margin calls.

Reuters reported https://www.reuters.com/article/us-nmc-health-m-a-exclusive/exclusive-two-groups-one-backed-by-chinas-fosun-bid-for-nmc-health-stake-sources-idUSKCN1VB20R previous year that NMC was also the target of two groups, one backed by China's Fosun, looking to buy a 40% stake in it. "We are unsure how deep the rot at NMC goes, but we do not believe that its insiders or financials can be trusted". It's now the biggest private health-care provider in the United Arab Emirates.

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